5.3 - Proposed key reform directions

The national interest requires different objectives to be weighed and values reflected. This means that the EPBC Act will never satisfy all stakeholders all of the time. A key driver of low trust in the EPBC Act is lack of confidence that it is contributing to achieving environmental outcomes. The suite of reforms proposed by this Review is designed to work together to lift trust in the EPBC Act and its operation.

The setting of National Environmental Standards and the development of regional plans are key mechanisms to set the clear outcomes that the EPBC Act intends to achieve (see Chapter 1). Many of the reform directions proposed in other chapters seek to provide greater confidence that decisions contribute to achieving these outcomes. These include a quantum change in the data and information that underpins the operation of the Act (see Chapter 6), the development of effective frameworks for monitoring and evaluating the operation of the Act and the broader national environmental management system (see Chapter 7), and effective, independent monitoring, compliance, enforcement and assurance (see Chapter 9).

Many of the reforms proposed will also reduce the time taken for regulatory decisions. Clear rules (see Chapter 1), greater harmonisation with other regulators (see Chapter 4) and better information, data and regulatory systems (see Chapter 6) will speed up the time taken to receive environmental approval.

The aim of the key reform directions proposed in this chapter is to minimise the demand for formal review, while providing the necessary access to the law demanded of modern regulatory practice. They seek to address the reasons the community chooses legal challenge over other mechanisms, while allowing for improvements to be generated from effective scrutiny and testing of decision-making through formal legal review.

5.3.1 - Improve community participation in decision-making and transparency of information

A fundamental reform is to facilitate adequate time for the community to consider information and respond to it.

Improved community participation in processes can save time by ensuring that the right information is surfaced at the right time and can be considered in the decision-making process. Best-practice community consultative processes are well established¹⁰⁶ and the National Environmental Standard for transparent processes and robust decisions should include specific requirements for community consultation.

Better information management systems (see Chapter 6) that are interactive and digitally connected can improve community access to information about decisions, including greater transparency of the stage of the decision-making process, the opportunities for community participation, and the information that is being considered in the decision-making process.

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 proposed requires information to be introduced and sustained 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’.

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

There is low trust that decisions are not subject to inappropriate political interference. Lack of trust is an underlying driver behind calls for independent authorities or commissions to make decisions¹⁰⁷.

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 these committees:

• Information and Knowledge (to advise on science, economic, social impacts and traditional knowledge)
• Indigenous Knowledge and Engagement (to advise on the co-design of reforms and the National Environmental Standard for Indigenous engagement)
• Threatened Species Science (to advise on the status of 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)
• A committee with water resources expertise (to advise on the impacts of projects subject to the water trigger(see Chapter 4)).

The ESD Committee should provide transparent advice to the Minister to inform decisions on the making of National Environmental Standards and regional plans, and the accreditation of arrangements for devolving decision-making. The Minister could request the Committee’s advice on other issues or decisions where they have relevant expertise.

The ESD Committee should provide the Minister with transparent formal advice on:

• the adequacy of the information provided to inform the decision
• whether the processes that underpin the recommendation have been conducted in accordance with relevant standards (for example, for community or Indigenous engagement)
• whether the recommendation is consistent with the National Environmental Standards.

In making a decision, the Minister should be required to provide reasons as to how the advice of the ESD Committee was considered.

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

The legal review framework should not be the primary determinant for the performance of the EPBC Act. However, effective, efficient and transparent decisions based on clear outcomes should reduce the demand for legal review.

The Review is not yet convinced that the current standing provisions in the EPBC Act (section 487) should be removed, but adjustments to legal review provisions should be made to provide for limited merits review ‘on the papers’. This form of review limits the considerations to those matters that were raised and maintained by the applicant during the due course of the regulatory decision or matters arising from a demonstrable material change in circumstances.

Standing

The Review is not convinced of the view that extended standing should be curtailed. 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, reliance on which would result in restoration falling fully on the public purse.

The courts 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 direct 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.

Although the review also found no reason to broaden standing under the EPBC Act, even open standing (as opposed to extended standing as set out in section 487) is not likely to result in a deluge of cases. As highlighted in the submission from the Law Council of Australia¹⁰⁸, the case law supports a finding that standing is not interpreted broadly by the courts as it is aimed at protecting the public interest rather than private concerns.

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 does not have a material impact on the outcome.

However, it may be beneficial for the EPBC Act to require an applicant seeking 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 the matter can proceed.

Form of legal review

Legal review processes are to ensure that decisions are:

• made correctly in accordance with the law (judicial review)
• ‘preferable’ such that, within the range of decisions possible under the law, the best decision is made based on the relevant facts (merits review)¹⁰⁹.

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 circumstances¹¹⁰.

Although the existence of judicial review helps ensure legal processes are followed, there is a need for merits review to ensure decisions are meeting the intent of the legislation, not simply following processes.

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, on appeal or review, to the admission of new documentation or materials for consideration 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.

The proposal for limited merits review ‘on the papers’ 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, it must be carefully designed to minimise perverse outcomes. A focus on good, transparent decision-making by the regulator is the primary consideration. 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.

The Review proposes merits review should be available for EIA decisions, but only:

• limited to specific decisions in the EIA process
• time limited in terms of when an action can be brought
• if its application is demonstrated to be in the interest of the desired outcomes.