Breaking New Ground: Insights Into the Second Round of ‘nature Positive’ Law Reforms

Key takeaways – what the Bills provide for

The establishment of the new EPA, our first independent Federal environmental regulator.

The establishment of the new position, Head of EIA, whose responsibility will be to improve the availability and accessibility of environmental information and data.

A global first, a legislated definition of the term ‘nature positive’.

Significantly increased criminal and civil penalties for environmental non-compliance, which will be consistent with the largest penalties under other federal regimes for financial crimes.

Arming the new EPA with stronger enforcement tools including expanded audit powers and the power to issue Environment Protection Orders.

Background

As foreshadowed in our previous alert, Stage 2 of the Federal environmental law reforms were tabled in Parliament by the Minister for the Environment (Minister) on 29 May 2024. They include the Nature Positive (Environment Protection Australia) Bill 2024 (EPA Bill), Nature Positive (Environment Information Australia) Bill 2024 (EIA Bill) and Nature Positive (Environment Law Amendments and Transitional Provisions) Bill 2024 (Transitional Bill).

The most significant reforms involving a complete overhaul of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) were deferred indefinitely and are set to occur as part of ‘Stage 3’. The timing for legislation to implement the Stage 3 reforms is still unknown. It seems likely we will not see Stage 3 legislation until after the 2025 Federal Election, with further consultation on key reform issues to take place in the interim.

EPA Bill

The EPA Bill proposes to establish the new independent, statutory authority of the EPA, including the appointment of its Chief Executive Officer (CEO), from 1 July 2025. Prior to 1 July 2025, the EPA will be part of the Department of Climate Change, Energy, the Environment and Water (Department). In light of this, the EPA’s intended powers are mostly contained in the Transitional Provisions Bill.

The EPA will be headed by the CEO. The appointment criteria for the CEO are extensive. Once appointed, the CEO can only be removed by the Governor General on limited grounds. The CEO will advise, assist and make recommendations to the Minister, and has broad functions in relation to many pieces of Federal environmental legislation including the EPBC Act, Environment Protection (Sea Dumping) Act 1981 (Cth), Hazardous Waste (Regulation of Exports and Imports) Act 1995 (Cth) and the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995.

The EPA Bill also provides some indication as to how the Minister and EPA CEO role will interact. The Minister may issue the CEO with a statement of expectations for the CEO and EPA at any time, which cannot direct the CEO in the performance of their powers. In response, the CEO must provide the Minister a statement of intent which is also to be published on the EPA website.

Under the EPA Bill, there are also some limited powers directly conferred upon the EPA, such as:

maintaining a register of registerable decisions;
information gathering;
disclosure of relevant information to other Commonwealth entities/State and Territory government bodies or for the purposes of law enforcement; and
convening an advisory body.

However, when the Transitional Bill receives royal assent (which may not necessarily be timed to the establishment of the EPA or EIA) compliance and enforcement powers under various legislation, particularly the EPBC Act, will also be transferred from the Minister to the EPA.[1] Additionally, the Minister can delegate any powers to the EPA CEO under the EPBC Act.[2]

Specifically, the following have been flagged as potential delegated powers:

to make environmental assessments;
to decide project approvals and conditions as a delegate of the Minister; and
educating industry, business and the community.

EIA Bill

The EIA Bill establishes the Head of Environment Information Australia (HEIA). The HEIA is to be an independent position, not subject to Government direction, with the following primary functions:

providing the EPA, the Minister, and the public with access to high quality data and information relating to the environment;
to develop and implement a monitoring, evaluation, and reporting framework on Australia’s progress towards achieving its nature positive goals;
to prepare and publish, forward looking State of the Environment reports every 2 years, instead of every 5 years;
to establish and maintain environmental economic accounts (with the assistance of the Australian Bureau of Statistics); and
to declare national environmental information assets.

Significantly, the EIA Bill defines, for the first time, the term ‘nature positive’ as:

an improvement in the diversity, abundance, resilience and integrity of ecosystems from a baseline.

In determining whether nature positivity is being achieved, a primary consideration is whether there has been an improvement in the diversity, abundance and resilience of species that form part of ecosystems. As part of its monitoring and reporting mandate, the HEIA will be required to establish a baseline against which all subsequent progress towards nature positive outcomes will be measured and reported. However, until the Stage 3 reforms are further progressed, stakeholders will not know with certainty what nature positivity might look like for future projects which trigger federal assessment and approval requirements.

State of the Environment reports are to be prepared by the HEIA and published on or before 30 September every second year. The State of the Environment Reports will contain information about the state of the environment (and be informed by scientific and Indigenous knowledge) as well as progress towards meeting the national environmental goals.

The Bill also introduces the concept of ‘environmental economic accounts’ which are defined as ‘statistical accounts that describe the condition of the environment and its relationship with the economy’. Whilst the exact nature of the accounts is not yet known, they are intended to bring together, and make sense of, information about the interrelated challenges and opportunities facing industry and the environment and demonstrate that investing in the environment can also lead to economic gains. A statement of at least one of these accounts will need to be given to the Minister annually.

HEIA will also be responsible for the declaration of ‘national environmental information assets’, which the EIA Bill defines as data, or information which is critical to matters in which the EPA or the Minister has functions under a national environmental law. This function is intended to increase transparency and accountability in relation to information streams deemed critical to the Minister and the CEO’s regulatory functions and addresses one of the key focus areas of the Bills.

Transitional Bill

The Transitional Bill supports the establishment of the Commonwealth EPA (EPA) from 1 July 2025 and the creation of the HEIA.

The Transitional Bill will confer permitting, licensing, and compliance and enforcement responsibilities directly onto the CEO of the EPA in relation to:

recycling and waste exports;
hazardous waste;
sea dumping;
ozone protection;
underwater cultural heritage;
air quality; and
species permitting.

The amendments proposed in the Transitional Bill will allow the Minister and Secretary of the Department to delegate their powers and functions under the EPBC Act to the CEO and senior staff of the EPA and, following the establishment of the EPA, transfers various functions to the CEO of the EPA including audit powers and Environment Protection Orders (EPOs). Further, the Transitional Bill will confer compliance and enforcement powers for conduct affecting Commonwealth reserves and conservation zones directly onto the Director of National Parks.

A noteworthy development for proponents proposing to undertake actions under the EPBC Act is that they can now elect out of ‘stopping the clock’ when the decision-maker needs further information to make a decision on a controlled action, assessment approach or approval decision. Currently, the clock stops on the statutory timeframes when the decision-maker needs further information. Under the Transitional Bill, proponents would be given notice about why additional information is needed and can decide whether the decision-making timeframes should be paused. This may provide a greater degree of certainty for project proponents on decision making timeframes.

The Transitional Bill also amends the EBPC Act with the aim of strengthening environmental compliance and enforcement functions and increasing penalties for serious contraventions.

A sharper focus on compliance and enforcement

To complement to the establishment of the EPA, significant changes are also proposed in the Transitional Bill to introduce new enforcement powers and increased penalties. These key changes are as follows.

What happens next?

The three Bills are yet to be debated by the House of Representative or Senate, and it is hoped that process is completed by the end of the year. If the Bills successfully pass through both Houses of Parliament, they will commence on 1 July 2025. It is likely that further consequential amendments will be needed to both the EPA Bill and EIA Bill if the Stage 3 reforms are eventually introduced into Parliament.

As we saw with the passage of legislation to establish the nature repair market (discussed in our previous alert), some ‘horse-trading’ may be necessary to secure the successful passage of the Bills, so it will be important to watch this space. Stay tuned for our further updates!

Power	Description	Example uses 2
Environment Protection Orders (EPOs)	Issued by the Minister (and following 1 July 2025, the CEO of EPA), EPOs (also labelled ‘stop work’ orders) address, prevent, treat and mitigate imminent significant environmental risk and harm under urgent circumstances. They are to be used to secure compliance with the EPBC Act or to take necessary measures to investigate, prevent and control actions. In order for an EPO to be issued, there must be an imminent risk of serious damage. There are strong penalties for non-compliance with an EPO (maximum $313,000) including both a fault based and strict liability threshold offence.
Increased penalties	The Transitional Bill introduces a new civil penalty regime for environmental non-compliance which is modelled on similar schemes under Commonwealth legislation targeting financial crimes. It aims to ensure penalties are commensurate to the value and capacity of a body corporate and safeguard against unlawful actions being considered “the cost of doing business”. The maximum penalty for a body corporate that breaches a civil penalty provision is the greater of: $15,650,000 (50,000 penalty units); The value of the benefit derived or detriment avoided multiplied by three; or 10% of annual turnover 12 months before the breach, up to a maximum of $782,500,000 (2.5 million penalty units).
Audit powers	Existing audit powers are to be expanded through new compliance audits and updated directed environmental audits. The existing directed environmental audits are to be expanded to those persons subject to an EPO, conservation orders, remediation determination or remediation orders. The Minister may require compliance audits, with the auditor to be chosen from a register of independent auditors maintained by the Minister.