Posted on March 21, 2021 by Sophia Urlich and Carlo Zoppo

Conflicting Proposals for Reforms to the EPBC Act: Is the end of Bilateral Agreements in sight?

Reforms are proposed to the federal Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

On 29 October 2019, the Minister for the Environment, the Hon. Sussan Ley MP, commissioned the second Independent Review of the EPBC Act. Professor Graeme Samuel AC was appointed as the independent reviewer, supported by an expert panel. The Independent Review considered the operation of the EPBC Act, whether its objects have been met, and any changes required for Australia to support ecologically sustainable development into the future. The Final Report of the Independent Review of the EPBC Act (Final Report) was submitted to the Minister for the Environment on 30 October 2020, and has been released to the public.

Separately, the Environment Protection and Biodiversity Conservation Amendment (Streamlining Environmental Approvals) Bill 2020 (Amendment Bill) was introduced to the federal House of Representatives on 27 August 2020, and to the Senate on 6 October 2020.

The Amendment Bill proposes a suite of amendments that seek to streamline the current processes for environmental assessment and approvals under the EPBC Act, particularly with regard to bilateral agreements, by way of devolving environmental approvals to the States and Territories. However, the Final Report recommends a complete overhaul of the EPBC Act, including by way of the introduction of a new staged accreditation model that will replace bilateral agreements altogether.

Key reforms recommended in the Final Report 

The Final Report includes 38 recommendations for reform and a 3 tranche reform pathway that is intended to be delivered within a 2 year timeframe. It considers that the EPBC Act and its operation require fundamental reform, as the EPBC Act is duplicative, ineffective, inefficient and costly for the environment, business and the community.

New legally enforceable environmental standards 

The Final Report’s central recommendation is the introduction of new National Environmental Standards (Standards), in the form of legally binding and enforceable rules set out in Regulations that will apply nationwide.

These Standards are intended to provide clear rules and improve decision-making. They aim to set clear requirements for those who interact with the EPBC Act and clear boundaries for decision-makers, and aim to prescribe how activities at all scales, including actions, decisions, plans and policies, contribute to outcomes for the environment.

A full suite of recommended Standards is set out at Appendix B of the Final Report. The Final Report recommends that the Standards that have been developed in detail be adopted in full and implemented immediately, and that the other necessary Standards referred to in less detail be further developed and implemented without delay.

New Environment Assurance Commissioner

The Final Report recommends the creation of a new, independent, statutory position of Environment Assurance Commissioner to provide oversight and audit of Commonwealth decision-making and accredited arrangements under the EPBC Act.

New staged accreditation model for third-party decision-makers  

The Final Report recommends the introduction of a new staged accreditation model for decision-makers other than the Commonwealth based on the Standards that will eventually replace the existing bilateral agreement processes under the EPBC Act. However, the Commonwealth will have an ongoing role in directly assessing and approving certain developments, and the Minister for the Environment will retain the unfettered right to make decisions.

The Final Report found that:

Significant shortcomings exist in the current arrangements. The requirements of the EPBC Act mean that even where they are in place, bilateral agreements do not cover all development types. For example, activities are unable to be accredited under the current inflexible bilateral provisions where States and Territories do not actively assess certain development types – such as code-based developments – or where assessments are conducted by local councils under local planning laws.

For a single project, bilateral agreements may cover some aspects of the project, but not all. For example, not all clearing of habitat or nationally threatened species can be accredited due to the way State and Territory land clearing laws are constructed. The NSW land clearing codes are not an ‘assessment and approval’ process that is equivalent to Part 5 of the EPBC Act, and hence cannot be accredited under a bilateral agreement.

Bilateral agreements contain provisions committing parties to information-sharing and cooperation in surveillance. However, under the current arrangements this does not occur in a meaningful way.’

(see page 98, Final Report).

The recommended accreditation model will involve the following 6 key steps:

  1. Making the Standards: Standards will be made to define clear outcomes for matters of national environmental significance, and for important processes, to set the legal benchmark for protecting the environment and to enable the outcomes of decisions to be measured.
  2. Accreditation Assessment: a State or Territory or other suitable party proposing to be accredited will self-assess arrangements, and will need to demonstrate that they have the capacity to deliver the outcomes of the Standards. The public will be given an opportunity to comment on the proposed arrangements.
  3. Commonwealth Accreditation: the Environment Assurance Commissioner will check the arrangements and provide independent advice to give confidence that they are consistent with the Standards and can be effectively audited. Federal Parliament will then be given the opportunity to consider and disallow the arrangements that are proposed to be accredited. If the proposed arrangements are not disallowed by the Parliament, the Minister for the Environment will then formally accredit the arrangements if they are satisfied they can meet the Standards and the parties can assure accountability for outcomes.
  4. Transparent intervention pathways: transparent pathways will enable the Minister for the Environment to intervene in a proportionate and escalating way when accredited arrangements are not performing well or failing, or where there is a dispute between the Minister and an accredited party, or there is a serious risk of environmental harm.
  5. Strong audit and independent oversight: the Environment Assurance Commissioner will provide strong audit and oversight to give confidence that decision-makers are adhering to the Standards and the provisions of bilateral accreditation.
  6. Regular formal review: regular formal reviews of accredited arrangements will be undertaken to make any necessary adjustments and to ensure they are contributing to environmental outcomes.

The Final Report recommends that, in the short-term, the Standards should be applied through the current assessment and approval bilateral agreement provisions of the EPBC Act. However, in the longer term, the EPBC Act should be amended to fully replace the bilateral agreement provisions with the recommended accreditation model.

Other recommended reforms

Other key elements of the broader reform framework recommended in the Final Report are:

  • comprehensive redrafting and restructuring of the EPBC Act with a view to clarifying and simplifying its functions and how they interact, and including consideration of how the EPBC Act interacts with other Commonwealth legislation and whether it should be divided into separate pieces of legislation, to deliver a more effective and efficient legislative framework;
  • the respectful inclusion of Indigenous Australians’ knowledge and views in decision-making, including by way of replacing the existing Indigenous Advisory Committee with a new Indigenous Engagement and Participation Committee;
  • the provision of comprehensive expert advice to decision-makers;
  • independent oversight and auditing of accredited arrangements and decision-making notwithstanding the identity of the decision-maker;
  • full transparency of decisions that are made;
  • appropriate legal review and access to justice;
  • strategic planning and investment in the restoration of the environment;
  • high-quality accessible data and information;
  • strong, independent compliance and enforcement of project-level activities;
  • formal and comprehensive monitoring, evaluation and reporting on environment outcomes.

Key reforms proposed in the Amendment Bill

The key amendment proposed in the Amendment Bill is the prevention of actions the subject of an approval bilateral agreement being referred to the Commonwealth.

Proposed new s66A provides that Part 7 of the EPBC Act will not apply to actions the subject of a bilateral agreement between the Commonwealth and a State or Territory that are included in a class of actions that are declared to not require approval under Part 9 of the EPBC Act for the purposes of a specified provision of Part 3, and which are:

  • approved by a State or Territory in accordance with a bilaterally accredited management arrangement or authorisation process, for the purposes of the bilateral agreement (see s66A(1)), or
  • being, or to be, assessed by a State or Territory under relevant State or Territory laws, and which may be approved in accordance with a bilaterally accredited management arrangement or authorisation process, for the purposes of the bilateral agreement (see s66A(2)).

Therefore, the referral of such actions to the Commonwealth under Part 7 will be prevented.

Part 7 of the EPBC Act will continue to apply to actions the subject of an approval bilateral agreement that has been suspended or cancelled generally or in relation the specified class of actions the action is part of (see s66A(3)). In such circumstances, the proposed amendments will enable the Minister for Environment to make use of a completed, or partially completed, State or Territory assessment to complete the assessment and approval process under the EPBC Act.

If an action is to be taken in 2 or more States or Territories, proposed s66A will not operate unless the action operates in relation to each of those States or Territories (see s66A(4)).

The Amendment Bill also proposes to:

  • introduce more flexibility into the performance of assessments of controlled actions,
  • remove the prohibition on approval bilateral agreements applying to an action that has, will have or is likely to have a significant impact on water resources,
  • allow the Minister for Environment to accredit a broader range of State and Territory approval processes for the purposes of approval bilateral agreements,
  • enable the States and Territories to make minor changes to environmental assessment processes without the need for the amendment of a bilateral agreement or the reaccreditation of a management arrangement or authorisation process, and
  • make technical amendments in relation to the making and operation of bilateral agreements.

The Final Report can be viewed here. The Amendment Bill can be viewed here.

To discuss this blog or the application of the EPBC Act generally, please contact Carlo Zoppo (Partner) on 8235 9705 or Sophia Urlich (Lawyer) on 8235 9708.