It has been almost 12 months since the Federal Government unveiled its ‘Nature Positive Plan’, which set the stage for 2023 to be filled with extensive environmental reform. While draft reform legislation was due to be bundled up with a bow in time for Christmas 2023, the Government seems to have hit some potholes on its road to ‘nature positive’.
Notwithstanding the delays and setbacks to the reform process, the Government remains committed to its ‘nature positive’ agenda. In this alert, we provide an update on where things are up to and where the reforms are headed as 2024 looms.
Background
In December 2022, the Federal Government released its Nature Positive Plan as the blueprint for reshaping federal environmental laws and replacing the current Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) (see our previous alert here). Among the proposed reforms was the rollout of National Environmental Standards (NES), the establishment of an independent federal Environment Protection Agency, and the creation of a “world first” Nature Repair Market designed to boost private investment in nature restoration (see our previous alert here).
The Nature Positive Plan stated that draft legislation for the EPBC Act reforms would be prepared in the first half of 2023 and introduced into Parliament by the end of 2023, after first undergoing extensive consultation and being released as an exposure draft.
Separate draft legislation for the Nature Repair Market was prepared, consulted on and introduced into Parliament by late March 2023. The Government planned for further consultation to occur throughout this year, with a view to the market being operational by mid-2024.
Reforms to the EPBC Act: updates and predictions
Government announcements and Hansard records indicate that:
- the EPBC Act will be replaced by a package of 4 pieces of legislation which span over 1,000 pages in total (and 7 NES will also be developed as part of the reforms);
- the draft legislation package will no longer be introduced into Parliament – or even released to the public in exposure draft form – by the end of December 2023;
- all 4 Bills which make up the reform package must be ready before any will be introduced (as the package will be introduced as a whole);
- the Government is not committing to new reform timing, but aims for legislation to be introduced “as early as possible in 2024”; and
- consultation is currently only occurring on a ‘closed’ and invite-only basis, although a public webinar will soon be held.
Notably, 39 organisations (including peak industry bodies but no individual companies) were invited to attend a ‘budget lockup-style’ consultation in Canberra on 30 and 31 October 2023. Further ‘rolling consultation’ of this nature is expected to occur, with another session likely to be held before the end of 2023 and up to 2 more likely to be held in early 2024.
At this stage, the Government is unable to confirm when and what public consultation might occur, beyond a 90-minute webinar which will be offered to the public in late November 2023. It is unclear if companies and individuals who are not included in the closed consultation process will receive access to, and the opportunity to comment on, an exposure draft of the reform package prior to its introduction to Parliament.
Our predictions
While we hope to see draft legislation by the end of the first quarter in 2024, this may more realistically stretch out to mid-2024.
The reform process to date hasn’t been smooth sailing, and we don’t expect that will change once legislation is introduced. The reforms will need to pass both Houses, although the Government only holds a majority in the House of Representatives. The Government will need to secure support from other members in the Senate (including potentially the Greens, who indicated when the Nature Positive Plan was released that it did not go far enough to protect the environment).
New Nature Repair Market: updates and predictions
The Nature Repair Market Bill 2023 (Cth) and Nature Repair Market (Consequential Amendments) Bill 2023 (Cth) (NRM Bills) passed in the House of Representatives in June 2023, before moving to the Senate.
The Senate Environment and Communications Legislation Committee (Senate Committee) was originally due to report on the NRM Bills by 1 August 2023. One day prior to this, an extension to 1 November 2023 was granted, and one week prior to that new deadline, a further extension to 18 April 2024 was granted.
These delays coincide with criticisms of the proposed market and the resistance the Government is facing in the Senate over the NRM Bills. Most relevantly:
- there is opposition from the Greens, environmental groups and other stakeholders, largely because the Nature Positive Plan contemplates a nature repair project potentially being able to fulfil environmental offset requirements for other projects – this may result in a market designed to repair and invest in nature instead being driven by compliance and ‘nature destruction’ elsewhere;
- there are concerns there is not enough private sector demand for a nature repair market and it will fall to the Government to drive and fund it (unless, of course, the market is to be driven by compliance if ultimately able to be used for offsetting project impacts);
- the Coalition has withdrawn its support for the NRM Bills, on the basis the proposed nature repair scheme has “diverged far too far” from a similar scheme previously proposed by the Morrison Government; and
- there are calls to defer the NRM Bills until after the broader EPBC Act reforms have progressed, to avoid ‘putting the cart before the horse’.
Our predictions
We expect the Senate Committee’s new reporting deadline of April 2024 is designed to align with the broader EPBC Act reform timeline and that the Government is unlikely to progress the NRM Bills until after the broader reform package has been introduced.
When the NRM Bills are progressed, we expect they will need to undergo further reform – or other horse-trading in the Senate will need to occur - to ensure sufficient support in the Senate can be obtained. A key issue to monitor will be whether the market can ultimately be used to offset the environmental impacts of other projects, including how this would operate with the general environmental offset reforms expected under the Nature Positive Plan.
Notwithstanding the resistance the Nature Repair Market is facing, the global push for ‘nature positive’ is showing no signs of slowing down. To the contrary, in September 2023 the Taskforce on Nature-related Financial Disclosures published its final framework for market adoption, which marks an important first step towards mandatory nature-related reporting in Australia (see our previous alert here). We expect this, and the emerging focus on nature more broadly, may raise new considerations for directors when it comes to discharging their duties of care and diligence.
Next steps
We will continue to monitor all aspects of Australia’s ‘nature positive’ reforms, including how any transitional arrangements are intended to operate.
The public webinar will explain how the proposed changes are designed to work and how they compare to existing laws, with a question-and-answer session to follow. The webinar will be offered from 2:00pm to 3:30pm AEST on 23 November 2023, and again from 12:30pm to 2:00pm AEST on 28 November 2023. Registration details will soon be available here.
We encourage industry to have its say on the reforms over the coming months, by attending the public webinar, connecting with the organisations who are participating in the closed consultation, and engaging in further public consultation processes once they become available.