Interim Report

4.1 - There is duplication with state and territory regulation

June 2020

4.1.1 - There have been efforts to streamline with the states and territories

The EPBC Act was drafted to include several tools to achieve streamlining and harmonisation between the Commonwealth and states and territories. Strategic assessments (see Chapter 1) have been one mechanism to do this. Others, including a common assessment method for listing threatened species, and bilateral assessment and approval agreements are explored further in this section.

The water trigger (see Box 11) and nuclear trigger (see Box 12) matters of national environmental significance (MNES) are often cited as areas where streamlining is incomplete. The evidence presented to the Review suggests these areas have significant potential to be further streamlined, while ensuring that the national interests continues to be upheld.

Common assessment methods for threatened species listing

The Commonwealth and all state and territory governments have been working since 2015 to implement a common assessment method for listing threatened species and ecological communities. This work is formally underpinned by an intergovernmental memorandum of understanding.

Any jurisdiction can undertake a national assessment using the common assessment method, the outcome of which will be adopted by other jurisdictions where that species occurs, as well as the Commonwealth (under the EPBC Act). This means that a species is only assessed once and is listed in the same threatened category across all relevant jurisdictions.

This work is supported by the states and territories67 and 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, which leads to corresponding improvements in efficiency.

To date 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. Consideration should be given to the benefits of moving to a single list of nationally protected matters. The Commonwealth could maintain this list on behalf of all jurisdictions.

Bilateral assessment agreements

The EPBC Act allows for the accreditation of state 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.

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) which has the same effect as if a bilateral assessment agreement was in place. This ensures continued streamlining and reduced impact on projects but highlights the inherent fragility of the agreements.

Between July 2014 and June 2019, 37% of proposals under the EPBC Act were assessed (or were being assessed) through either a bilateral assessment (25%) or accredited assessment (12%) arrangement with states and territories. Figure 1 shows the breakdown over this period.

Figure 1 - Percentage of projects assessed under bilateral and accredited processes for all states and territories, 1 July 2014 to 30 June 2019

There are significant shortcomings 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, where states and territories do not actively assess certain development types (for example, code-based developments) or where approvals are given by local councils under local planning laws, these activities are unable to be accredited under the current inflexible bilateral provisions. 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 constructed68.

Figure 2 provides the breakdown by jurisdictions and shows that approaches to streamline arrangements have had varied success between jurisdictions.

Figure 2 - Percentage of projects assessed under bilateral and accredited processes for Australian states and territories, 1 July 2014 to 30 June 2019

Australian Capital Territory
New South Wales
South Australia
Queensland
Northern Territory
Tasmania
Victoria
Western Australia

Both proponents and regulators are supportive of bilateral assessment agreements and acknowledge the benefits they provide69. Benefits for proponents include70:

  • 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, as individual MNES are considered in the landscape context required by state and territory arrangements.

Similarly, as co-regulators with the Commonwealth, the states and territories support effective bilateral assessment agreements71. 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 timeframes for project assessments.

For example, the NSW Government advises in their submission to the Review that since the commencement of the 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 and has led to an overall reduction in time frames for project assessments’72.

Access to the same data and information is also important to promote efficiency in the conduct of joint assessments (see Chapter 6).

Box 11 - The water trigger

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, responding to community concern at the time of the perceived inadequacy of state-based water regulation of these types of activities. The 2013 Act amendments prohibit the Commonwealth from devolving responsibility for water trigger approval decisions to the state or territory.

Stakeholders have presented highly polarised views to the Review about the operation of the water trigger. Industry stakeholders argue that it duplicates state-based water regulatory frameworks and should be removed73. Others call for an expansion of the trigger to cover activities such as shale or tight gas extraction, all hard rock mining, or indeed any action that may have a material impact on water resources74.

The operation of the water trigger suffers from insufficient definition of the water resources covered, or the scale of significance of the impact on these resources it is seeking to regulate. Further, it targets the activity of part of a specific sector, which seems to result in regulatory inconsistency. Only large coal mining and coal seam gas projects are regulated under the water trigger, when other activities may conceivably pose 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, and this responsibility is reflected in the National Water Initiative, 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 projects on water resources more generally including impacts on other 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.

That said, 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. Proposals with the potential to impact protected matters as a result of direct or indirect changes to the water resources on which they rely 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 a project that risks irreversible damage or contamination to a water resource that the environment of another relies on. The capacity to step in should be clearly linked to processes for development assessments and approvals.

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.

The Review proposes that the water trigger and IESC be retained but modified:

  • The trigger should be limited to consideration of any project that risks irreversible depletion or contamination of cross-border water resources only. The argument that the trigger not be limited to large coal and coal seam gas projects is compelling, but any potential expansion of scope would require careful consideration to avoid duplication with other Commonwealth and state and territory regulatory requirements.
  • If state and territory laws meet Commonwealth Standards, then they should be able to be accredited.
  • The National Environment Standard for MNES should explicitly define key terms, including a cross-border water resource and irreversible depletion or contamination of the resource.
  • If the water trigger is changed, the name and remit of the IESC should be adjusted to reflect any altered focus. The Commonwealth Environment Minister (or devolved decision-maker) must seek the advice of this Committee when considering a proposal against the National Environmental Standard. The expertise and advice of the Committee should also be available to the states and territories at their request, subject to the capacity and priorities of the Committee.

Box 12 - Nuclear activities

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, and any change in scope is similarly a policy choice of elected parliaments. That said, should Australia’s policy shift in relation to these types of nuclear activities, changes to s140A would be required.

The second way nuclear activities are regulated under the EPBC Act is the so-called ‘nuclear trigger’ (section 22(1)), whereby ‘nuclear actions’ that are likely to have a significant impact on the environment need to be assessed and approved by the Commonwealth. 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 the certain thresholds, and
  • Commonwealth agencies undertaking nuclear transport, research or waste treatment.

For Commonwealth agencies, most referrals received do not require approval because activities are conducted in accordance with the regulatory guidelines and protocols under the Australian Radiation Protection and Nuclear Safety Act 1998 (ARPANS Act) and regulated by the Australian Radiation Protection and Nuclear Safety Authority (ARPANSA).

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. ARPANSA75 highlighted in its submission that if jurisdictions adopt relevant national codes developed under the ARPANS Act, then EPBC Act assessments can lead to 'substantially the same assessment activities being undertaken across multiple jurisdictions creating duplicative regulatory processes'.

To be able to ensure community confidence in these 'nuclear' activities, the Commonwealth should maintain the capacity to intervene. To achieve this, the key reform directions proposed by the Review are:

  • The National Environmental Standards for MNES should include one for nuclear actions. To provide community confidence, the Standard should reflect the regulatory guidelines and protocols of all relevant national laws and requirements.
  • Where states and territories can demonstrate their laws and management practices meet the National Environmental Standard, their arrangements should be able to be accredited under the proposed devolution model.
  • Where arrangements are not accredited, projects should be assessed by the Commonwealth in accordance with the Standard.

Approval bilateral agreements

Despite attempts by successive Australian Governments, approval bilateral agreements have never been implemented. Under such an agreement, the Commonwealth would not apply the EPBC Act; instead relying on the state or territory decision to achieve an acceptable environmental outcome. At the time of its introduction the water trigger was prevented from being included in approval bilateral agreements (see Box 11).

Under the current settings, devolution is inherently fragile and amendments to the EPBC Act are required to make them stable and to work efficiently in practice. A suite of amendments76 were pursued by the then Australian Government in 2014 to support the implementation of its 'One Stop Shop' policy and to provide a more enduring framework for devolution. Particularly important amendments are needed to:

  • enable the Commonwealth to complete assessments and approvals if a 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 2014 the then Australian Government was unable to secure the necessary parliamentary support for the legislative changes required. There was considerable community and stakeholder concern that environmental outcomes were not clearly defined and the states and territories would not be able to uphold the national interest in protecting the environment. A lack of clear environmental (as opposed to process) standards fuelled political differences at the time.

This community concern remains. Submissions to the Review highlighted ongoing concern about the adequacy of state and territory laws, their ability to manage conflicts of interest, and increased environmental risks if the Commonwealth steps away77.

In their submissions to the Review, jurisdictions expressed a range of views on this, including both an ongoing desire to pursue the devolution of approvals powers (for example, WA Government78 and SA Government79) as well as continue to improve existing arrangements (for example, ACT Government80, NSW Government81 and NT Government82).

4.1.2 - Duplication with states and territories remains

Despite efforts to streamline, a key criticism of the EPBC Act from many proponents and their representatives is that the Act duplicates state and territory regulatory frameworks for development assessment and approval83. The Review has found that with a few exceptions, this is largely true.

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 (see Chapter 1). However, as the regulatory systems of the states and territories have changed over time, and with increasing jurisdictional cooperation, the regulatory gap filled by the Act has reduced, resulting in duplication. For example:

  • Most states and territories have made changes to their environmental or planning laws to improve environmental impact assessment processes and laws to enable accreditation for bilateral agreements.
  • Joined-up assessments mean that many Act project approvals mirror those given by the relevant state or territory. The Act Condition-setting Policy84 currently 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 the Commonwealth has maintained the importance of due process and undertaken assessment and approval. Submitters point to examples such as the rejection of the state sponsored Traveston Dam in Queensland in 2009, and fast-tracked processes for state Significant Development in NSW as evidence of this85.

While far from perfect (see Chapter 1 and Chapter 8) the EPBC Act policy for 'like for like' offsets exceeds requirements in some jurisdictions. This results in additional or different conditions placed on projects that have better outcomes than would have otherwise been the case.

Contributions 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 project86. 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 Territory87).

Frustration rightly arises when regulation under the EPBC Act does not, or 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, including:

  • the Minerals Council of Australia88 estimated delays can increase the cost up to $46 million per month for a major greenfield mining project (worth $3–4 billion) in Australia
  • the Property Council of Australia89 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 Legislation90 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. As 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), caution should be exercised. 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 (for example, Productivity Commission91), the Review finds there is regulatory duplication that should be addressed. There is a clear case for greater harmonisation, but to achieve this, states and territories must demonstrate they can effectively accommodate the national interest. The process should not be one of negotiated agreement.

Footnotes

[67] For example, NSW Government, ANON-QJCP-UGDX-6.

[68] For example, the NSW land clearing codes are not an ‘assessment and approval’ process under Part 5 of the EPBC Act, and hence can not be accredited under a bilateral agreement. Some uncertainty has arisen under current arrangements because while NSW legislation requires approval under the Biodiversity Conservation Act 2016 (NSW) once certain thresholds are reached, this may still allow for significant impact on an MNES, particularly if the impacts do not arise from vegetation clearance.

[69] See the Productivity Commission 2020, Resources sector regulation: draft report; NSW Government, ANON-QJCP-UGDX-6

[70] These examples are drawn from a range of submissions in response to the EPBC Act Review Discussion Paper, including: Australian Energy Council, ANON-K57V-XQUV-1; NSW Minerals Council, ANON-K57V-XQKA-2; Rio Tinto, ANON-K57V-XG3K-A.

[71] This sentiment is echoed in most state and territory submissions in response to the EPBC Act Review Discussion Paper.

[72] For example, NSW Government, ANON-QJCP-UGDX-6.

[73] For example, see the following submissions in response to the EPBC Act Review Discussion Paper: Association of Mining and Exploration Companies, ANON-K57V-XYQ4-3; Minerals Council of Australia, ANON-K57V-XGCN-W.

[74] This view was expressed in several submissions in response to the EPBC Act Review Discussion Paper, including: Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC), ANON-K57V-XFQ8-M; National Environmental Law Association, ANON-K57V-XQKQ-J; The Wentworth Group of Concerned Scientists, ANON-K57V-XQTW-1; WWF Australia, ANON-K57V-XQKR-K; Northern Territory Government, ANON-K57V-XQVU-1.

[75] Australian Radiation Protection and Nuclear Safety Agency (ARPANZA), ANON-K57V-XQRM-N, Submission in response to the EPBC Act Review Discussion Paper.

[76] See EPBC Amendment (Bilateral Agreement Implementation) Bill 2014.

[77] Examples of submissions in response to the EPBC Act Review Discussion Paper making this point include: Northern Land Council, ANON-QJCP-UGJD-R; The Wentworth Group of Concerned Scientists, ANON-K57V-XQTW-1; WWF Australia, ANON-K57V-XQKR-K; Australian Conservation Foundation, ANON-K57V-XQXS-1.

[78] Western Australian Government, ANON-QJCP-UGJU-9.

[79] South Australian Government, ANON-K57V-XQ2V-X.

[80] ACT Government, ANON-QJCP-UGT2-G.

[81] NSW Government, ANON-QJCP-UGDX-6.

[82] Northern Territory Government, ANON-K57V-XQVU-1.

[83] For example, see submissions in response to the EPBC Act Review Discussion Paper: Environmental Institute of Australia and New Zealand (EIANZ), ANON-K57V-XG33-J; Australian Petroleum Production and Exploration Association (APPEA), ANON-QJCP-UGHK-W; Urban Development Institute of Australia, ANON-K57V-XZ53-7.

[84] Department of Agriculture, Water and the Environment 2020, EPBC Act Condition-setting Policy.

[85] Submissions in response to the EPBC Act Review Discussion Paper referring to these issues include: Lara Harland, ANON-K57V-XZS7-9; Julie Ho, ANON-K57V-XZR1-2; Prue Bartlett, ANON-K57V-XYM9-4.

[86] This sentiment came through in a range of submissions in response to the EPBC Act Review Discussion Paper, for example: Brett Mason, ANON-K57V-XZUZ-E; Anonymous, ANON-K57V-XFY2-P; and Frances Bell, ANON-K57V-XFG9-B.

[87] See Northern Land Council, ANON-QJCP-UGJD-R.

[88] Minerals Council of Australia, ANON-K57V-XGCN-W.

89] Property Council of Australia, ANON-K57V-XQ5D-F.

[90] Hunter S 2017, Independent Review of the Water Trigger Legislation.

[91] Productivity Commission 2019, Resources Sector Regulation Draft Report.

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