The year 2023 is shaping up as a significant year for legislative reform in Australia, with comprehensive changes to fundamental environment and climate change laws expected.
In December 2022, the Federal Minister for Environment and Water (Minister) announced the ‘Nature Positive Plan’, providing insight into the anticipated reform of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).
The Plan forms part of the Federal government’s ambitious approach to environmental protection, complementing their recent commitments to zero new extinctions, stronger emissions reductions and protecting 30% of Australia’s land and oceans. The reforms are in response to the October 2020 independent review into the EPBC Act by Professor Graeme Samuel AC (Samuel Review) and the 2021 State of the Environment Report.
The Nature Positive Plan and underlying commitments also coincide with the adoption of ‘Kunming-Montreal Global Biodiversity Framework’ (GBF) on 18 December 2022, aiming to achieve four overarching global goals:
- Protect nature, including: halting human-induced extinction of threatened species and reducing the rate of extinction of all species tenfold by 2050.
- Sustainable use and management of biodiversity to ensure that nature’s contributions to people are valued, maintained and enhanced.
- Fair sharing of the benefits from the utilisation of genetic resources, and digital sequence information on genetic resources.
- Adequate means of implementing the GBF be accessible to all Parties, particularly Least Developed Countries and Small Island Developing States.
The GBF was agreed at the 15th meeting of the Conference of Parties to the UN Convention on Biological Diversity (COP15).
Key reforms under the Nature Positive Plan
Key features of the proposed reforms are:
- National Environment Standards (NES) will be introduced with initial standards focusing on Matters of National Environmental Significance (MNES), First Nations engagement and participation in decision-making, community engagement and consultation, regional planning, and environmental offsets.
- Projects will be required to provide estimates of their scope 1 and scope 2 emissions expected across the life of the project, and to explain the project’s approach to managing emissions in line with national commitments.
- The EPBC Act’s current water trigger will be expanded to include all forms of unconventional gas.
- Regional plans will be developed with a “traffic light” system identifying areas of high environmental value, areas of moderate environmental value, and development priority areas.
- A four-step hierarchy of action will be introduced in relation to offsets and will require project proponents to demonstrate attempts to avoid and mitigate harm before resorting to environmental offsets or conservation payments.
- An independent Federal Environment Protection Agency (EPA) will be established, with its functions to include making decisions about development proposals and approval conditions. The Minister will have power to call in decisions that would otherwise be made by the EPA.
Each of these, in addition to other important reforms, are discussed below.
Introduction of NES
Following a consultation process, NES will be established by legislation to provide transparency, streamline processes, and support faster decision-making. As contemplated by the Samuel Review, States and Territories will be able to apply to become accredited to allow for single-touch decision-making.
Initial NES will focus on:
- Matters of National Environmental Significance (MNES)
- First Nations engagement and participation in decision-making
- community engagement and consultation
- regional planning
- environmental offsets.
The NES for MNES will be developed first and made available in 2023. Once established, any new projects will need to comply with it. Projects and plans approved under national environmental law will have to avoid unacceptable and unsustainable impacts on MNES and deliver net positive outcomes for MNES.
Climate change
All projects assessed under national environmental law will be required to provide estimates of the scope 1 and scope 2 emissions expected across the life of the project. Each project must describe their approach to managing emissions in line with the government’s emissions reduction commitments.
Consistent with the Samuel Review recommendations, this is not a climate trigger. However, there is concern it may resemble one depending on drafting and implementation.
Notably this requirement is silent as to scope 3 emissions, which may be challenged during consultation by environmental groups.
Water trigger expansion
In addition to coal seam gas and large coal mining developments which are currently covered under the EPBC Act, the water trigger will be expanded to include all forms of unconventional gas. This is a departure from the Samuel Review recommendations and as such is likely to be challenged during consultation.
Regional plans “traffic light” system
Regional plans will be built around a three-tiered “traffic light” system to pre-identify areas for protection, restoration, sustainable development, and priority action and investment. These areas will be categorised as either:
- areas of high environmental value, where development will be largely prohibited
- areas of moderate environmental value, where development will be allowed subject to an approval process and agreed rules
- development priority areas, where development can proceed without Commonwealth environmental approval.
The first round of regional plans is to be completed by 2028. Once in place, individual projects must demonstrate compliance with regional plans.
Offset hierarchy
Reforms will introduce the following four-step hierarchy of action:
- avoid harm to the environment
- reduce or mitigate environmental damage
- identify offsets within the region that deliver a net gain for the imperilled plants or animals
- make a conservation payment to enable a better overall environmental outcome.
This hierarchy will be strictly enforced, and project proponents will need to demonstrate attempts to avoid and mitigate harm to protected matters before resorting to environmental offsets. Where proponents are unable to find or secure 'like for like' offsets, they will be able to make a conservation payment sufficient to achieve a net positive environmental outcome.
Federal EPA
In keeping with Labor’s election promise, an independent EPA responsible for compliance and enforcement is set to be established by legislation. While this is consistent with the Samuel Review, it is anticipated that the ambit of this proposed EPA will extend beyond that recommendation, causing significant concern amongst stakeholders.
The EPA’s role will include making decisions about development proposals and approval conditions. The precise form this new body will take is unclear, as is its interaction with State-level EPAs.
The Minister will have the power to call in decisions about development proposals that would otherwise be made by the EPA, and to approve proposed developments with an unavoidable negative environmental impact on MNES if it is clearly in the national interest to do so.
Other proposed reforms
In addition to the key reforms set out above, the Nature Positive Plan sets out a range of other proposed reforms, including:
- Conservation planning processes will be improved and underpinned by NES.
- The NES for First Nations engagement and participation in decision-making will enable First Nation’s views and knowledge to be considered on all project approvals and planning decisions.
- Single-touch decision-making for projects will be facilitated by allowing States and Territories to apply to become accredited under national environmental law, with oversight provided by the EPA.
- A nature repair market will be established through consultation with stakeholders to encourage investment in restoration activities. This is expected to consist of a public register for biodiversity projects, and biodiversity certificates to be traded to compensate or offset damage.
- Various regulatory requirements will be improved and streamlined, including moving application processes online, simplification and standardisation of public comment processes, and clarifying information to be considered in decision-making.
- A Data Division will be created within the Department of Climate Change, Energy, the Environment and Water to provide environmental information and data. The Data Division will implement a National Environmental Data Strategy to inform its interaction with stakeholders.
- Potential future management models for Commonwealth National Parks will be co-designed with Traditional Owners to provide Traditional Owners with increased control and management.
- Collaboration between the Commonwealth and the States and Territories on environmental policy and law reform will be encouraged.
Transitional provisions
Careful consideration will need to be given to transitional provisions to ensure they adequately provide for projects currently undergoing assessment and decision reviewing processes. The Samuel Review recommended a two-year transition period, however, we now await the draft Bill for a better understanding of the form this transition will take.
What is next?
The proposed package of reformed national environmental legislation is set to be prepared in the first six months of 2023. Extensive stakeholder consultation will take place during this period and draft legislation will be released to enable further consultation. An exposure draft of the legislation will be released prior to its introduction to Parliament by the end of 2023, which will provide further insight into the likely industry impacts of this sweeping reform.
We will keep you updated on consultation steps and proposed changes as they develop.
