Interim Report

5.2 - Industry perceives the EPBC Act to be cumbersome and prone to unnecessary delays

June 2020

5.2.1 - Complexity of the EPBC Act leads to uncertainty for business

The complexity of the EPBC Act leads to cumbersome processes, which are inefficient for both business and government. This adds to regulatory costs, without any associated environmental benefit (see Chapter 3 and Chapter 7). For example, the EPBC Act does not allow decision-makers to correct or adjust decisions that are faulty only on technical grounds. This leads to unnecessary process delays for industry, without necessarily changing the substance of the original decision.

Judicial review cases have driven a culture of ‘box-ticking’ within the Department. This has led to fewer resources being dedicated to assisting proponents to improve outcomes for the environment and more on administering processes.

The information used to make a decision and how the decision is made based on that information is not always consistent or clear. This leads to uncertainty for proponents. Past decisions are not transparent. Industry cannot derive lessons from previous interactions with the EPBC Act, which would lead both to efficiency and improvements over time. This is in contrast to determinations made under tax law or competition law, which are public and searchable.

5.2.2 - Duplicative processes and slow decision-making drive up costs

An underlying theme of industry mistrust in the EPBC Act relate to its perceived duplication with state and territory processes (see Chapter 4) and the length of time it takes to receive an approval. These are key reasons why industry is calling for a ‘one-stop-shop’ model to reduce duplication and assessment time frames.

On average, resources sector projects can take nearly 3 years, or 1,013 days to approve under the EPBC Act97, and this is too long. For business, time is money. On large projects, time delays can result in significant additional costs (see Box 16) for time frames related to resources sector projects). The recent provision of additional resources to conduct EIAs has improved performance from 19% to 87% of key decisions made on time.

There is also little accountability in the post-approval phase. There are no statutory time frames for these decisions, and this has led to increased uncertainty and delay for industry98

Box 16 - Time frames for assessment and approval of resource projects under the EPBC Act have increased over time

Since the commencement of the EPBC Act, the average time taken for large, complex resource projects to be assessed and approved has increased from an average of 817 days to 1,013 days (see Figure 4). The time taken for the Minister to make an approval decision on these projects also increased to an average of approximately 223 days.

Figure 4 Average number of days taken for approvals processes under the EPBC Act for resource projects

These time frames do not factor in time taken for post approval requirements, such as the development of management plans, which can be significant. They also do not factor in appeal time frames.

Submissions have noted that businesses have experienced time delays due to statutory deadlines being missed by the regulator. The Minerals Council of Australia100 cited project examples of where it has taken 7 months to make a controlled action decision with a 20 business day statutory time frame (EPBC 2019/8534), and 87-business days to make an approval decision with a 40-business day statutory time frame (EPBC 2017/7902).

Lengthy assessment and approval processes are not all the result of a slow Commonwealth regulator. On average, the process is with the proponent for more than 3 quarters of the total assessment time(example in Figure 4). This includes the time needed to collect required environmental information and collate necessary documentation, or when projects are shelved for periods of time for commercial reasons by proponents. In some instances, projects that require state and Commonwealth approvals can be held up by state or territory assessment and approval processes. In rare cases, Commonwealth approvals can be received years before a state or territory approval101

5.2.3 - Industry is concerned that legal challenges add further delays

Poor trust in the EPBC Act has played out in a lengthy public debate about ‘green lawfare’, with accusations that politically motivated environment groups use the courts to delay projects. The public discourse on legal challenges is focused on large projects, with considerable economic benefits that impact highly valued environmental areas102. Pro-development groups argue that the extended standing provisions (standing beyond a person directly affected by a decision) should be removed from the Act. Previous attempts have been made to remove these provisions103.

Highly conflicting evidence and viewpoints have been received by the Review about whether there is significant abuse or gaming of appeal mechanisms under the EPBC Act104. Generally, only a small number of decisions have been challenged relative to the approximately 6500 projects referred under the Act (19 challenges in the last 5 years).

Similarly, evidence from other jurisdictions indicates that open standing arrangements (which are broader than the current provisions in the EPBC Act) do not necessarily lead to excessive numbers of legal challenges. In NSW, less than 2% of development applications are challenged via judicial or merits review105.

The focus should not be to limit the capacity of people to use legal review to challenge decisions in the public interest. Rather, the excessive process requirements as well as improving communication and transparency for the EPBC Act should be addressed as a matter of urgency to remove the most significant sources of delay and to increase certainty. This effort will minimise the drivers for legal challenge, particularly for litigation that is vexatious or without reasonable prospects of success.

Footnotes

[97] Productivity Commission 2020, Resources sector regulation: draft report.

[98] See Productivity Commission 2020, Resources sector regulation: draft report ; and submissions to the EPBC Act Review Discussion Paper from the Minerals Council of Australia (MCA), ANON-K57V-XGCN-W, and the Australian Petroleum Production and Exploration Association (APPEA), ANON-QJCP-UGHK-W.

[100] Minerals Council of Australia (MCA), ANON-K57V-XGCN-W. Submission in response to the EPBC Act Review Discussion Paper.

[101] See examples in Productivity Commission 2020, Resources sector regulation: draft report.

[102] For example: the Shenhua Watermark coal mine, the Carmichael coal mine (Adani), and Shree Minerals (Tarkine).

[103] For example, the Environment Protection and Biodiversity Conservation Amendment (Standing) Bill 2015.

[104] See for example Macintosh A, Roberts H and Constable A 2017, ‘An Empirical Evaluation of Environmental Citizen Suits under the Environment Protection and Biodiversity Conservation Act 1999’. Sydney Law Review, Vol.39(1), pp.87-124; Wallace K 2020, Section 487: How activists use Red Tape to stop development and jobs (2020 update), Institute of Public Affairs; and Productivity Commission 2020, Resources sector regulation: draft report, Canberra.

[105] Macintosh A, Gibbons P, Jones J, Constable A and Wilkinson D 2018, ‘Delays, stoppages and appeals: An empirical evaluation of the adverse impacts of environmental citizen suits in the New South Wales land and environment court’, Environmental Impact Assessment Review, Vol.69, pp.94-103.

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