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9.4 - Proposed key reform directions

An effective EPBC Act monitoring, compliance, enforcement and assurance function will require legislative amendments to improve the regulatory toolkit and structural change to increase independence and build trust. These amendments to the Act will be best supported by commensurate resourcing and evolution of a stronger culture.

Key reforms proposed by the Review, including simplifying the EPBC Act and setting clear standards (see Chapter 1 and Chapter 3), will assist with greater clarity of obligations to support voluntary compliance and the ability to better enforce provisions. These reforms should be supported by specific guidance for sectors in line with recommendations by the Craik Review. Combined, these efforts will improve the Department’s ability to convey regulatory obligations, and improve the regulated community’s ability to understand them.

9.4.1 - Independent monitoring, compliance, enforcement and assurance with improved transparency

An independent monitoring, compliance, enforcement and assurance regulator that is not subject to actual or implied direction from the Environment Minister should be established. This is important to address significant community concern about perceived conflict of interest, which is undermining their trust in the EPBC Act.

An independent, strong cop on the beat will provide confidence that once conditions are set, they will be enforced to deliver the intended outcomes.

The regulator should have improved transparency, publishing all actions taken in a timely manner. It should publish on its website the directions, prohibition notices and improvement notices it makes and provide follow up when they have been met. The regulator should also publish a clear set of compliance priorities and should report against an annual compliance plan.

The regulator must also set out a clear and strong regulatory stance. While it remains important to be proportional, and to work with people where inadvertent non-compliance has occurred, the regulator needs to establish a culture that does not shy from firm action where needed. This is essential to providing community confidence and giving business a clear and level playing field.

9.4.2 - Consolidate, strengthen and modernise monitoring, compliance, enforcement and assurance provisions within the EPBC Act

The monitoring, compliance, enforcement and assurance powers in the EPBC Act should be overhauled. The Regulatory Powers (Standard Provisions) Act 2014 provides a standardised approach to setting out such powers, and these should be bolstered with specific arrangements to ensure that monitoring, compliance, enforcement and assurance powers in the EPBC Act are fit for purpose. The regulator should have a full ‘tool-kit’ available to it, so that fair, consistent and proportionate action can be taken across different scenarios.

Changes to the monitoring, compliance, enforcement and assurance provisions of the EPBC Act should include, but not be limited to:

  • standardised powers to delegate authorised officers to undertake EPBC compliance, including to states and territories
  • incorporation of modern information sharing provisions—supporting collaboration with other regulators
  • improvements to coercive powers under the Act to facilitate greater intelligence capability, including using surveillance warrants.

Penalties must be sufficient to be an active deterrent, rather than a cost of doing business. A review of the adequacy of penalties and provisions should consider, but not be limited to:

  • ensuring penalties across the EPBC Act align with the potential harm or benefit and provide a reasonable deterrance
  • ensuring remediation orders that deliver restoration are used when monetary penalties are unlikely to provide adequate disincentive, due to the potential significant financial benefit from some areas of non-compliance
  • ensuring appropriate use of criminal prosecutions in serious cases of egregious and irreparable damage.

9.4.3 - Shift focus of monitoring, compliance and enforcement towards assurance of standards

The Review proposes reforms that will support greater devolution in decision-making (see Chapter 4). Clear, legally enforceable National Environmental Standards combined with strong assurance are essential to community confidence in these arrangements.

The proposed reform promotes the greater use of regional-level plans, with other regulators and proponents working under agreed rules in a regional context. Together with the National Environmental Standards, a simplified Act, better guidance material and the potential of intelligent systems, will increase confidence in the self-assessment of actions and provide assurance for those actions that demonstrate they can meet the rules.

This shift will not remove the need for monitoring, compliance and enforcement on individual projects, but it will require a refocus and shift over time to provide the assurance needed that standards, plans and other strategic tools are delivering the intended environmental outcomes.

Transparent, independent oversight of these devolved and strategic arrangements will be critical to building community trust that the EPBC Act is effectively protecting the environment and our iconic places in the national interest.

The Commonwealth independent regulator must have power and authority to deal with all breaches of the EPBC Act, even by accredited decision-makers, such as a state or territory. The devolved decision-maker should remain primarily responsible for monitoring, compliance and enforcement of conditions set to meet National Environmental Standards. Reporting on accredited arrangements should include reporting on all potential breaches, and the response taken. The Commonwealth should retain the ability to intervene in project-level compliance and enforcement, where egregious breaches are not being effectively dealt with by the state regulator.

While transition will occur, it is important that the legacy of projects already approved under the EPBC Act have appropriate monitoring and oversight. Approved activities often take years to complete and will continue to require careful management and oversight to ensure environmental protection is achieved over the long-term.

9.4.4 - Sustainable resourcing

Monitoring, compliance, enforcement and assurance functions must be adequately resourced, and resources sustained over the long-term.

In the short-term there is a need to invest in appropriate systems and tools to enable the independent compliance regulator to effectively deliver monitoring and risk-based compliance, to help people comply with the EPBC Act and to assure the community that risks to the environment from non-compliance are identified and managed. Resourcing must support adequate monitoring and more than basic follow-up action to respond to issues as they arise. Proactive monitoring, surveillance and investigation are needed to restore public trust in the system and to review and ensure actions that have occurred to date are meeting requirements and delivering for the environment.