Introductory Info

Date introduced: 27 August 2020
House: House of Representatives
Portfolio: Environment
Commencement: Schedules 1–4 and items 1, 2 and 4–10 of Schedule 5 commence the day after Royal Assent; item 3 of Schedule 5 commences immediately after item 11 of Schedule 3.

The Bills Digest at a glance

Purpose of the Bill

• The Bill proposes to amend the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act) to expand and clarify provisions which allow the Commonwealth to delegate environmental approval powers to the states and territories through bilateral agreements (to create ‘single touch’ environmental approvals).

Background

• The Bill is almost identical to a Bill introduced into Parliament in 2014, which lacked sufficient support in the Senate and subsequently lapsed in 2016. That Bill aimed to facilitate the Government’s ‘one-stop shop’ policy for environmental approvals (now referred to as ‘single touch’ environmental approvals).
• The Bill has been introduced during a ten year independent statutory review of the EPBC Act. The review’s Interim Report was released in June 2020, with a final report due in October 2020.

Key issues and stakeholder concerns

• Stakeholders, including conservation groups and the Law Council of Australia, are concerned that the Bill is being rushed through Parliament before finalisation of the independent statutory review. They consider that the Bill should be referred to a Senate Committee for inquiry.
• Environment groups do not support the Bill as a result of a number of concerns including:
  • the Bill replicates a 2014 Bill and does not address key recommendations in the Interim Report, including in particular the development of national environmental standards prior to the delegation of approval powers to states and territories
  • the accreditation of state and territory approval processes may create greater complexity
  • the Commonwealth should provide strong leadership on environmental matters, particularly in relation to Australia’s obligations under international environmental agreements
  • the Bill proposes to remove the restriction on approval bilateral agreements covering actions involving coal seam gas development or large coal mining development that are likely to have a significant impact on a water resource (known as the ‘water trigger’)
  • state and territory governments do not have sufficient resourcing, nor adequately robust processes, to assess and approve projects that may significantly impact on matters of national environmental significance
  • state and territory governments may have a conflict of interest in approving developments in which they are involved or which they actively support.
• Industry groups appear not to have directly commented on this Bill, but have for many years called for measures to remedy duplication between the EPBC Act and state and territory approval processes, which they consider causes additional delays and costs for proponents of relevant projects. In responses to the EPBC Act review’s Interim Report, many industry groups supported the Interim Report’s recommendation for clear national environmental standards.
• A report by the Australian National Audit Office in June 2020 found that the administration of the EPBC Act by the Department has been ineffective, with a large increase in delays in decision-making under the EPBC Act since 2014–15. It has been suggested that these delays are largely a result of staffing and funding cuts in the Department administering the EPBC Act.

Purpose of the Bill

The purpose of the Environment Protection and Biodiversity Conservation Amendment (Streamlining Environmental Approvals) Bill 2020 (the Bill) is to amend the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act) to expand and clarify provisions which allow the Commonwealth to delegate environmental approval powers to the states and territories through bilateral agreements

The Bill largely replicates the Environment Protection and Biodiversity Conservation Amendment (Bilateral Agreement Implementation) Bill 2014 (2014 Bill), which was introduced into Parliament in 2014, but lapsed in 2016 at the prorogation of parliament for the federal election in 2016.[1]

Structure and overview of the Bill

The Bill has five Schedules:

• Schedule 1 proposes amendments to clarify that actions covered by approval bilateral agreements do not need to be referred to the Commonwealth
• Schedule 2 contains amendments to enable the assessment and approval of actions to be completed in certain situations, such as where a bilateral agreement with a state or territory is suspended or cancelled
• Schedule 3 has two parts:
  • Part 1 proposes to remove the restriction relating to the ‘water trigger’ so that actions involving coal seam gas development or large coal mining development that are likely to have a significant impact on a water resource can be subject to an approval bilateral agreement and
  • Part 2 would extend the types of authorisation processes that can be accredited by approval bilateral agreements
• Schedule 4 contains amendments to enable states and territories to make changes to management arrangements or authorisation processes without the need to amend an approval bilateral agreement, where the Minister makes a determination and is satisfied that change will not have a material adverse impact on a matter protected under the EPBC Act, or on a person's ability to participate in the authorisation process and
• Schedule 5 contains miscellaneous amendments, including to enable a broader range of entities such as local governments to approve actions under approval bilateral agreements.

Background

The EPBC Act is currently administered by the Department of Agriculture, Water and the Environment (the Department).

The EPBC Act provides that certain actions (including projects, developments, undertakings or activities)[2], known as ‘controlled actions’, must be referred for environmental assessment and approval by the Commonwealth Environment Minister. Under the EPBC Act, a ‘controlled action’[3] is an action that has, will have or is likely to have a significant impact on:

• a ‘matter of national environmental significance’[4]
• the environment on Commonwealth land[5] or
• the environment, where the action is undertaken by the Commonwealth Government or a Commonwealth agency.[6]

The current matters of ‘national environmental significance’, which are largely based on Australia’s responsibilities under international agreements dealing with environmental protection, are set out in Part 3 of the EPBC Act as follows:

• world heritage properties
• national heritage places
• wetlands of international importance
• listed threatened species and ecological communities
• listed migratory species
• Commonwealth marine areas
• the Great Barrier Reef Marine Park
• nuclear actions (such as uranium mines) and
• water resources in relation to large coal mining and coal seam gas developments (known as the ‘water trigger’).[7]

A more detailed overview of the EPBC Act is available in the Parliamentary Library’s Environment Protection and Biodiversity Conservation Act 1999: A Quick Guide.[8]

Environmental assessment processes

Actions that require approval under the EPBC Act undergo an environmental assessment process, as set out in the EPBC Act, and supplemented by the Environment Protection and Biodiversity Conservation Regulations 2000. A useful flowchart of the environmental assessment process is available on the Department’s website.[9] There are three key stages to this process:

1.    Referral: A proposed action is first ‘referred’ by the proponent to the Commonwealth Environment Minister for his or her decision as to whether the action is a ‘controlled action’: that is, whether it requires formal assessment and approval under the EPBC Act. This decision is based on whether the proposed action is likely to have a significant impact on one or more of the matters of national environmental significance (as listed above) or on the environment if it involves Commonwealth land or a Commonwealth agency. If approval is required, then the proposed action proceeds to the assessment and approval stage.

2.    Assessment: The Minister (or his or her delegate) determines the method of assessment for the controlled action, based on considerations set out in the EPBC Act and Regulations. The assessment methods include: an accredited assessment approach, assessment based on information contained in the referral to the Commonwealth, assessment based on preliminary documentation, a public environment report (PER), an environmental impact statement (EIS) or a public inquiry. The appropriate assessment approach will depend on a range of matters, such as the scale and nature of an action’s impacts.

In practice, assessment bilateral agreements are in place with all states and territories (as discussed below). This means that many projects are assessed under accredited state or territory processes, but the Commonwealth Environment Minister makes the final decision as to whether or not to approve the action (and whether the approval is subject to conditions).

3.    Approval: Once a project has been assessed, the Commonwealth Environment Minister decides whether to approve an action under the EPBC Act, and the conditions to attach to that approval.

Assessment and approval may also be required at the state or territory level under relevant state or territory legislation. Some industry groups argue this is unnecessary duplication which, in turn, results in additional costs and delays for those projects.[10] In an attempt to minimise this duplication, the EPBC Act allows the Commonwealth to enter into bilateral agreements with the states and territories, as discussed in the next section.

Bilateral agreements

Bilateral agreements are made under Part 5 of the EPBC Act and enable the Commonwealth to accredit relevant state and territory processes, to effectively delegate the assessment and/or approval of actions which would otherwise require assessment and approval under the EPBC Act. The aim is to minimise duplication in the assessment and approval process for actions which require approval under both Commonwealth and state or territory laws.

There are two types of bilateral agreements:

• assessment bilateral agreements, made under subsection 47(1) of the EPBC Act, which provide for a single assessment process by accrediting a state or territory process to assess the environmental impacts of a proposed action.[11] After assessment, the proposed action still requires two separate approval decisions from the Commonwealth (under the EPBC Act) and relevant state or territory frameworks
• approval bilateral agreements, which can accredit the assessment and approval process of a state or territory.[12] A proposed action taken in accordance with a process accredited under an approval bilateral agreement does not require approval by the Commonwealth Minister.[13] Approval bilateral agreements cannot currently cover projects involving the water trigger.[14]

Assessment bilateral agreements have been made with all states and territories.[15] However, as discussed later in this Digest, state and territory approval processes have not been accredited under approval bilateral agreements to date.[16]

Approval bilateral agreements—accreditation thresholds

Under the EPBC Act, approval bilateral agreements may declare that certain actions do not need approval from the Commonwealth Environment if they are taken in accordance with either a ‘bilaterally accredited management arrangement’ or a ‘bilaterally accredited authorisation process’. Under section 29 of the EPBC Act, an action taken in accordance with an accredited management arrangement or authorisation process under an approval bilateral agreement will not require the approval of the Commonwealth Environment Minister.

Section 46 of the EPBC Act is one of the key provisions relating to approval bilateral agreements, and provides for the Commonwealth Environment Minister to accredit a management arrangement or authorisation process of a state or territory.

However, sections 50–54 of the EPBC Act also contain a number of requirements which must be satisfied before approval bilateral agreements can be entered into and/or before the Minister can accredit a management arrangement or authorisation process under section 46. So, the Minister must be satisfied that the bilateral agreement accords with the objects of the EPBC Act (as set out in section 3 of the EPBC Act, these include the principles of ecologically sustainable development along with the precautionary principle).[17] In addition, the Minister may only accredit a state or territory management arrangement or an authorisation process if the Minister is satisfied that the relevant arrangement or process:

• is not inconsistent with Australia's obligations under the relevant international agreement (such as the World Heritage Convention[18])
• will promote the management of the protected areas in accordance with the Australian World Heritage management principles, National Heritage management principles or the Australian Ramsar management principles[19]
• promotes the survival and/or enhances the conservation status of any relevant listed threatened or migratory species[20] and is not inconsistent with any relevant recovery plan or threat abatement plan[21]
• provides for adequate assessment of the impacts of the action on each matter of national environmental significance protected under the EPBC Act[22] and
• that actions approved in accordance with an accredited management arrangement or authorisation process will not have unacceptable or unsustainable impacts on any of the matters protected by the EPBC Act.[23]

These threshold requirements are not changed by this Bill.

The Minister must table a copy of the relevant management arrangement or authorisation process in Parliament prior to accreditation, and the relevant accreditation is subject to disallowance by either House of Parliament.[24] This requirement also remains unchanged by this Bill.

History of approval bilateral agreements

The EPBC Act has had provisions for both assessment and approval bilateral agreements since it first came into force in 2000, although they were one of the more controversial aspects of the EPBC Act at the time of its original passage through Parliament.[25] As outlined earlier, approval bilateral agreements have never been implemented.

In 2012, following the first ten year review of the EPBC Act, the Labor Government signalled its preparedness to negotiate the transfer of environmental approval powers to states and territories as part of its response to the review.[26] However, in December 2012, then Prime Minister Julia Gillard subsequently indicated that more work was needed to progress such bilateral agreements to ensure that high environmental standards would be consistently maintained across all jurisdictions. The Prime Minister also reportedly said that it was necessary for the Commonwealth to maintain powers over World Heritage, Commonwealth waters and nuclear issues.[27] She also expressed concern that there was too much variation between states:

“I became increasingly concerned we were on our way to creating the regulatory equivalent of a Dalmatian dog,” she said. “For businesses that would be the worst of all possible worlds. It would leave them with more litigation. We would have projects that were identical around the country subject to different treatment.”[28]

‘One-stop shop’ reforms[29]

Following a change of government at the 2013 federal election, approval bilateral agreements were placed back on the agenda as part of the Government’s ‘one-stop-shop’ policy of having a single environmental assessment and approval process on matters of national environmental significance.[30]

In October 2013, the Environment Minister, Greg Hunt, announced that the Government had approved a framework consisting of a three stage process for achieving a one-stop-shop to streamline environmental approvals.[31] First, a Memorandum of Understanding was signed with each state and territory in December 2013.[32] In December 2013, COAG also agreed to work to develop bilateral agreements for ‘one-stop-shops’ for environmental approvals in each state.[33]

The second stage involved new or revised assessment bilateral agreements, which were in place with each state and territory by December 2014.[34] The final stage involved agreement on bilateral approvals with ‘willing states’ and, while draft approval bilateral agreements were published for some states and territories in 2014–15, none were ever finalised.[35]

Notably, subsections 65(2) and (3) require the Minister to review the operation of a bilateral agreement at least once every five years, and to publish the report of that review in accordance with the Regulations (which require publication in the Gazette and on the internet).[36] As such, it appears that many of the current assessment bilateral agreements are overdue for review.

In March 2014, the Commonwealth Government released a policy document, Standards for Accreditation of Environmental Approvals under the Environment Protection and Biodiversity Conservation Act 1999, which sets out environmental standards and considerations for accreditation of state and territory approval processes through bilateral agreements.[37]

Bilateral Agreement Bill 2014

In May 2014, the Environment Protection and Biodiversity Conservation Amendment (Bilateral Agreement Implementation) Bill 2014 (the 2014 Bill) was introduced in Parliament to amend the EPBC Act and aimed to ‘facilitate the efficient and enduring implementation of the Australian government's one-stop shop reform for environmental approvals’.[38] That Bill was the subject of inquiry and report by the Senate Environment and Communications Legislation Committee.[39] Both ALP and Greens Senators issued dissenting reports and did not support the Bill.[40]

As indicated earlier in this Digest, this current Bill largely replicates that 2014 Bill. The 2014 Bill passed the House of Representatives in June 2014, with some government amendments (which have been incorporated into this Bill). However, the 2014 Bill never passed the Senate and lapsed in April 2016.[41]

Relevant reviews since the 2014 Bill

Since the 2014 Bill lapsed, there appears to have been little progress on the development of approval bilateral agreements. However, a number of reviews have expressed concerns about the administration and implementation of the EPBC Act. This includes:

• in 2017, an independent review of the water trigger which found, among other matters, that the trigger is an appropriate measure to address the regulatory gap that was identified at the time of its enactment.[42] Relevant aspects of this review are considered in the ‘Key issues and provisions’ section of this Digest
• in 2018, a review to examine the impact of the EPBC Act on agriculture and food production.[43] This followed concerns reportedly being expressed by some farmers about duplication and complexity under the EPBC Act.[44] A final report was released in June 2019 and found that the number of agricultural referrals under the EPBC Act had been relatively low.[45] Among other matters, the report found that the Department is ‘insufficiently resourced to enable timely, appropriate and effective assistance to be provided to project proponents in the agriculture sector’.[46] The report made 22 recommendations which it considered would ‘improve harmonisation between state and territory and Australian Government legislation’[47]
• in 2019, a Senate Committee issued an Interim Report for its inquiry into Australia’s faunal extinction crisis, which concluded that there are ‘serious questions about whether the EPBC Act is still fit for purpose and is in fact achieving [its] objectives’.[48] The majority report of the Committee recommended new legislation to replace the EPBC Act as well as an independent Environment Protection Agency (EPA) ‘with sufficient powers and funding to oversee compliance with Australia's environmental laws’.[49]

Australian National Audit Office (ANAO) report

On 25 June 2020, the Australian National Audit Office (ANAO) issued a report on the administration of referrals, assessments and approvals of controlled actions under the EPBC Act.[50] The report described the Department’s administration of the Act in this area as ‘not effective’:

Referrals and assessments are not administered effectively or efficiently. Regulation is not supported by appropriate systems and processes, including an appropriate quality assurance framework. The department has not implemented arrangements to measure or improve its efficiency.

The department is unable to demonstrate that conditions of approval are appropriate. The implementation of conditions is not assessed with rigour. The absence of effective monitoring, reporting and evaluation arrangements limit the department’s ability to measure its contribution to the objectives of the EPBC Act.[51]

Among other matters, the report found compliance with statutory timeframes has dropped significantly in recent years (see Figure below):

This decrease was most pronounced from 2014–15 to 2018–19, with the proportion of referral, assessment method and approval decisions made within statutory timeframes decreasing from 60 per cent in 2014–15 to five per cent in 2018–19. The average time taken for approval decisions increased from 19 days over the statutory timeframe in 2014–15 to 116 days over the statutory timeframe in 2018–19.[52]

Source: ANAO, Referrals, assessments and approvals, op. cit., p. 51.

The report found that the ‘reasons for exceeding statutory timeframes vary’ and may include:

… the department not considering that it has satisfactory information to assess the proposed action, administrative delays, disagreement between the department and the regulated entity over proposed conditions, and delays in state or territory approvals where actions are also subject to state or territory approval requirements. The department does not systematically record or report on the reasons for delays.[53]

In this context, the Government provided $25 million over two years to the Department in December 2019 for ‘Busting Congestion in the Environmental Assessment Process’: that is to enable the Department ‘to work through the backlog of environmental approval applications, with a focus on major projects’.[54] The Minister subsequently announced:

In the December quarter this year just 19 per cent of key assessment decision points were being made on time.

By March 2020 we are making 87 per cent on time and the Department is on track to make that figure 100 per cent by June 2020, with no relaxation of any environmental safeguards …

In December 19, there was also a backlog of 78 overdue key decisions. That backlog has already been reduced by 47 per cent and is on track to be cleared by the end of this year.[55]

More recently, the 2020–21 Budget provided an additional $36.6 million over two years from 2020–21 to ‘maintain the timeliness of environmental assessments and undertake further reforms’ under the EPBC Act.[56] This includes $12.4 million to ‘maintain the momentum’ established through the $25 million provided in December 2019.[57]

However, some commentators have suggested the increased delays in decision-making under the EPBC Act are a result of reduced resources and staffing in the Department, and any additional funding is ‘merely a reversal of previous funding cuts’.[58]

EPBC Act review and Interim Report

The EPBC Act contains a statutory requirement to review the operation of the Act every ten years.[59] The last review (known as the ‘Hawke Review’) reported in 2009.[60] The Government response to the review was released in 2011,[61] although legislation to implement its recommendations was never introduced prior to the change of government in 2013.

On 29 October 2019, the Minister announced the commencement of the next independent statutory review, led by Professor Graeme Samuel, to report to the Minister within 12 months.[62] The review released a discussion paper for public consultation in November 2019.[63] Nearly 30,000 submissions were received, including more than 3,000 ‘unique submissions’ and ‘around 26,000 largely identical contributions’.[64]

Following this consultation, the review released an Interim Report on 20 July 2020 ‘to share and test thinking’.[65] The Interim Report found the EPBC Act to be ‘ineffective and inefficient’[66] as it:

… does not enable the Commonwealth to play its role in protecting and conserving environmental matters that are important for the nation. It is not fit to address current or future environmental challenges.[67]

The Interim Report noted a ‘lack of trust’ in the EPBC Act: the community does not trust the Act to deliver effective protection of the environment, while industry views the Act as ‘cumbersome, duplicative and slow’.[68] To build confidence, the Interim Report suggested that an ‘independent cop on the beat is required to deliver rigorous, transparent compliance and enforcement’.[69]

The Interim Report also found that ‘the EPBC Act had failed to fulfil its objectives as they relate to Indigenous Australians’, and recommended that:

The suite of national-level laws that protect Indigenous cultural heritage in Australia needs comprehensive review. Cultural heritage protections must work effectively with the development assessment and approval processes of the EPBC Act.[70]

National Environmental Standards

The Interim Report suggested that ‘fundamental reform is required’ and that ‘new, legally enforceable National Environmental Standards should be the foundation’ of that reform.[71] The report proposed that the Standards should be regulatory instruments which set clear, strong, specific, measurable and granular rules which focus on outcomes, not process.[72]

The report suggested that the Commonwealth should make these standards ‘through a formal process set out in the EPBC Act’.[73] Professor Samuel described the development of National Environmental Standards as a ‘priority reform measure’.[74] As a first step, the Interim Report suggested Interim standards be developed ‘to facilitate rapid reform and streamlining’.[75] To this end, the Interim Report provided ‘prototype Standards’ for matters of national environmental significance in Appendix 1 of the report as a ‘starting point to stimulate discussion’:

The Review acknowledges that further work is needed to test and refine the Standard. It is based on key principles such as prevention of environmental harm and non-regression, and has been developed using existing policy documents and legal requirements. The prototype shows that an Interim National Environmental Standard for [Matters of National Environmental Significance] could be developed quickly and would immediately provide greater clarity and consistency for decision-making.[76] [emphasis added]

Reducing duplication

The Interim Report found that there is duplication between the EPBC Act and state and territory regulatory frameworks for development assessment and approval, and efforts to harmonise and streamline with these state and territory frameworks have not gone far enough.[77]

The Interim Report proposed that to remove duplication between the EPBC Act and state and territory systems, decisions should be devolved to other jurisdictions, where they demonstrate they can meet the National Environmental Standards.[78]

The Interim Report further suggested that the ‘durability of devolved decision-making’ should be improved.[79] In this context, the Interim Report notes that the EPBC Act already enables approval bilateral agreements to be entered into with states and territories, but that approval bilateral agreements have never been implemented.[80] The Interim Report also refers to the unsuccessful amendments proposed by the Commonwealth Government in 2014 which it suggests were designed to ‘provide a more enduring framework for devolution’.[81] The report suggests that ‘important amendments are needed to’:

• enable the Commonwealth to complete an assessment and approval if a state or territory is unable to
• ensure agreements can endure minor amendments to state and territory settings, rather than requiring the bilateral agreement to be remade (and consequently be subject to disallowance by the Australian Parliament on each occasion).

These and other necessary amendments have failed to garner support in the Australian Parliament. In 2015 the Parliament did not support these amendments, in response to significant community concerns about the ability of states and territories to uphold the national interest when applying discretion in approval decisions.[82]

At the same time, the Interim Report suggests that proposed national environmental standards (discussed further below) should alleviate some of the concerns that related to past legislation:

Previous attempts to devolve decision-making focused too heavily on prescriptive processes and lacked clear expectations and thresholds for protecting the environment in the national interest. The National Environmental Standards proposed by this Review provide a legally binding pathway for greater devolution, while ensuring the national interest is upheld.[83]

The report also recognised that the Commonwealth would need to ‘retain its capability to conduct assessments and approvals’ in certain circumstances, including:

… where the Commonwealth provides sole jurisdiction, where accredited arrangements are not in place (or cannot be used), at the request of a jurisdiction, or when the Commonwealth exercises its ability to step in on national interest grounds.[84]

Interim Report proposed ‘phase 1 reforms’

Chapter 10 of the Interim Report proposed a ‘reform pathway’, involving ‘three key phases’. The report suggested five areas of focus for the first phase of reforms as follows:[85]

• reduce points of clear duplication, inconsistencies, gaps and conflicts in the Act[86]
• issue Interim National Environmental Standards to set clear national environmental outcomes against which decisions are made
• improve the durability of devolved decision-making, to deliver efficiencies in development assessments and approvals, where other regulators can demonstrate they can meet Interim National Environmental Standards
• implement early steps and key foundations to improve trust and transparency in the Act, including publishing all decision materials related to approval decisions and
• legislate a complete set of monitoring, compliance, enforcement and assurance tools across the Act.[87]

Other longer term reforms proposed in the Interim Report are not discussed in this Digest in detail, but included, for example, the establishment of a ‘properly resourced’ independent regulator and a ‘comprehensive redrafting of the EPBC Act’ to focus on outcomes rather than process.[88]

Recent Government announcements

In a speech to a Committee for Economic Development of Australia (CEDA) conference on 15 June 2020, the Prime Minister flagged cutting approval times for big projects from the current 40 days to 30 days by the end of this year. He also announced a ‘priority list of 15 major projects that are on the fast-track for approval under a bilateral model between the Commonwealth, states and territories’.[89] The Departmental website states these 15 major projects ‘will be subject to the same requirements under the EPBC Act as all referred projects’, but the ‘Australian Government will work with the states and territories to establish joint assessment teams to progress these projects’ to reduce duplication in assessment processes between the two levels of government.[90]

On 20 July 2020, following the release of the EPBC Act review Interim Report, the Minister for the Environment stated that the Commonwealth will ‘prioritise the development of new national environmental standards, further streamlining approval processes with State governments and national engagement on Indigenous cultural heritage’.[91] She further stated that the Commonwealth will ‘commit to the following priority areas on the basis of the interim report’:

• Develop Commonwealth led national environmental standards which will underpin new bilateral agreements with State Governments.
• Commence discussions with willing states to enter agreements for single touch approvals (removing duplication by accrediting states to carry out environmental assessments and approvals on the Commonwealth’s behalf).
• Commence a national engagement process for modernising the protection of indigenous cultural heritage, commencing with a round table meeting of state indigenous and environment ministers …
• Explore market based solutions for better habitat restoration that will significantly improve environmental outcomes while providing greater certainty for business. The Minister will establish an environmental markets expert advisory group.[92]

She also noted that the Commonwealth would ‘take steps to strengthen compliance functions and ensure that all bilateral agreements with States and Territories are subject to rigorous assurance monitoring’.[93] However, at the same time, the Minister ruled out the establishment of an independent regulator as well as any expansion of the EPBC Act in relation to the regulation of greenhouse gas and other emissions.[94]

The Minister further noted that the Interim Report ‘raises a range of other issues and reform directions’, which would be the subject of further consultation.[95] The Minister concluded that the Government would monitor the review’s progress towards the final report, while continuing ‘to improve existing processes as much as possible’.[96]

In a subsequent interview on ABC radio on 21 July, the Minister indicated that the prototype environmental standards would be part of the legislation to be introduced.[97] She also stated that the Interim Report has ‘has made clear recommendations that we can start to implement now’.[98]

On 24 July 2020, the Prime Minister announced that the new National Cabinet had ‘agreed to move to single-touch environmental approvals underpinned by national environmental standards for Commonwealth environmental matters’:

Some states are able to transition to this system faster than others. The Commonwealth will move immediately to enter into bilateral approval agreements and interim standards with the states that are able to progress now.

We will simultaneously be developing formal national standards through further public consultation. The National Cabinet also endorsed the list of 15 major projects for which Commonwealth environmental approvals will be fast-tracked.

For major projects at the start of the approvals process, we will target a 50 per cent reduction in Commonwealth assessment and approval times for major projects, from an average of 3.5 years to 21 months.[99]

On 7 August 2020, the Government published notices of intention to develop draft approval bilateral agreements with all states and territories.[100]

In welcoming the passage of the Bill through the House of Representatives on 3 September,[101] the Minister for the Environment stated that the amendments are:

… the start of a process that is entirely consistent with Professor Graeme Samuel’s interim report and his findings in relation to an Act that is long overdue for reform.

… There will be more reforms to follow. We will develop strong Commonwealth-led national environmental standards which will underpin new bilateral agreements with State Governments.[102]

Committee consideration

The Senate Selection of Bills Committee considered the Bill and was unable to reach agreement.[103] A motion by Senator Hanson-Young to amend the Selection of Bills Committee report, which would have referred the Bill to the Senate Environment and Communications Legislation Committee for inquiry and report by 30 November 2020, was unsuccessful.[104] The Government did not support the motion, with Senator Cormann stating that the Bill is ‘a carbon copy of a bill into which there has already been an inquiry’.[105]

Subsequent motions by Senator Hanson-Young to refer the Bill to the Senate Environment and Communications Legislation Committee for inquiry and report were also unsuccessful.[106]

Senate Standing Committee for the Scrutiny of Bills

The Senate Scrutiny of Bills Committee raised concerns in relation to item 9 in Schedule 5, which inserts proposed section 48AA into the EPBC Act to provide that a bilateral agreement may apply, adopt or incorporate an instrument or other writing as in force or existing from time to time, even if the instrument or other writing does not yet exist when the agreement is entered into.[107]

The Explanatory Memorandum suggests this will ensure that the operation of a bilateral agreement is preserved when instruments and policy documents are updated, rather than requiring that the agreements are amended each time an instrument or document that is referred to, applied, adopted or incorporated in a bilateral agreement is updated.[108] The Explanatory Memorandum further notes:

Bilateral agreements may make reference to a range of Commonwealth, State or Territory instruments, policies or other documents including, for example, significant impact guidelines and species survey guidelines. State or Territories may also have policies that are specifically relevant to their assessment and approval processes.

To ensure ongoing continuous improvement and to allow for the maintenance of high standards for environmental approval, the Commonwealth or a State or Territory may update or revise instruments and policies from time to time. The application of the most current instruments and policies reflects the importance of ensuring that environmental assessment and approval decisions are based on the best scientific information available so that actions assessed and approved by the State or Territory under the bilateral agreement will not have unacceptable or unsustainable impacts on matters of national environmental significance.[109]

The Scrutiny of Bills Committee noted this explanation, but requested more detailed advice from the Minister as to:

… the type of documents that it is envisaged may be applied, adopted or incorporated by reference under proposed section 48AA and, in particular, whether these documents will be made freely available to all persons interested in the law.[110]

In response, the Minister advised that the types of documents that may be incorporated into bilateral agreements would include Commonwealth legislative instruments and policies (such as threatened species recovery plans), as well state or territory legislation, policies and plans. The Committee welcomed the Minister’s advice that the relevant policies and plans were expected to be made freely available, but noted there is no requirement for such documents to be made freely available on the face of the primary legislation. The Committee requested further advice from the Minister as to whether the Bill could be amended to require that any document incorporated into a bilateral agreement must be made freely available.[111]

Policy position of non-government parties/independents

ALP Senators, along with Senators Griff, Lambie and Patrick voted in favour of a Greens motion that there should be no debate on the Bill until after the tabling of either the final report of the EPBC Act review, or the Interim National Environmental Standards.[112] The same Senators also voted in favour an unsuccessful motion to refer the Bill to the Senate Environment and Communications Legislation Committee for inquiry and report.[113]

ALP

The ALP does not support the Bill.[114] The ALP’s Shadow Minister for the Environment and Water, Terri Butler, has described the Bill as a ‘backwards-looking failed Abbott law rehash’.[115] Ms Butler noted that the Interim Report’s proposals were ‘contingent on the creation of strong Interim National Environmental Standards’. The ALP considers that the Government:

… should not pursue amendments until the interim standards are finalised and made available to the people of Australia.

Without national environment standards recognised in law, each state jurisdiction could negotiate different standards into each agreement, which would increase job and investment delays and become a regulatory nightmare. [116]

Ms Butler has suggested that the Government should introduce strong national environmental standards, establish a genuinely independent ‘cop on the beat’ for Australia’s environment and, in light of the recent ANAO report, fix the ‘delays caused by their massive funding cuts’.[117]

The Greens

The Greens do not support the Bill. Leader of the Greens, Mr Adam Bandt, spoke against the legislation in his second reading speech, suggesting:

… the federal government is passing their responsibilities for protecting our environment onto the states, where there are weaker laws and fewer environmental protections ... We need more environmental protections, not less…. We need strong national environmental standards and an independent regulator who can properly enforce environmental protections.[118]

As noted in the ‘Committee consideration’ section of this Digest, Greens Senator Hanson-Young unsuccessfully moved motions in the Senate to refer the Bill to the Environment and Communications Legislation Committee for inquiry and report.[119] In moving the first motion, Senator Hanson-Young suggested that ‘it is absolutely essential’ to have ‘proper scrutiny of these laws’, which she described as a ‘full-blown attack on Australia's environment’. She also noted that the Bill ‘is effectively a carbon copy of the legislation tabled by Tony Abbott in 2014, when Tony Abbott was doing the bidding of big miners and big developers to strip environmental protections’.[120]

Centre Alliance

Centre Alliance has stated that it cannot consider supporting the Bill ‘until there is an inquiry into the legislation and more certainty regarding the Government's promised National Environmental Standards’. Ms Sharkie stated that Centre Alliance ‘supported efficiency but not at the expense of less protection for the environment’.[121] Senator Griff noted that he had voted in favour of an inquiry into the Bill, and expressed frustration that ‘the Government is resisting an inquiry into the Bill’ and that parliamentarians were being ‘asked to make decisions without a thorough understanding of the effects these changes will have’.[122]

Zali Steggall

Independent MP Ms Zali Steggall issued a statement in response to the Interim Report, which among other matters, expressed concern that the Government was rushing to devolve approvals and decision making to the states, had ruled out establishing an ‘independent cop on the beat’ to oversee the compliance and enforcement functions of the Act and had announced ‘hurried legislative changes without establishing strong Environmental Standards’.[123]

Ms Steggall subsequently tabled proposed amendments in the House of Representatives to:

• remove the amendments to allow approval bilateral agreements to cover actions under the water trigger
• require the Minister to make National Environmental Standards by legislative instrument
• provide that the Minister may only enter into a bilateral agreement if the Minister is satisfied that the agreement is consistent with those National Environmental Standards and
• provide that the Minister must not make certain decisions (as already listed in subsection 391(3) of the EPBC Act) unless the Minister is satisfied the decision is consistent with the National Environmental Standards.[124]

However, Ms Steggall’s amendments were not debated or discussed in the House of Representatives and the Bill passed the House of Representatives unamended.[125]

Helen Haines

Following the passage of the Bill in the House of Representatives, Dr Helen Haines expressed concern that the Bill would ‘weaken our environmental laws’ and described the Government’s approach to the House of Representatives debate as a ‘deplorable move’ and an ‘affront to our democracy’.[126]

Andrew Wilkie

Mr Andrew Wilkie MP described the Bill as ‘environmental vandalism’ which ‘completely ignores’ Professor Samuel’s interim recommendations to ‘accompany changes to the Act with stringent national standards and an independent regulator’.[127] He queried handing decision-making to state and territory governments who he considers are ‘conflicted and incapable of protecting the environment’. Mr Wilkie expressed particular concern about the Bill for Tasmania which he suggested needs the protection of effective federal environmental legislation ‘now more than ever’ as a result of the Tasmanian Government’s recent ‘Major Projects’ legislation which he suggested will allow ‘dodgy projects to be fast-tracked’.[128]

Senator Patrick

Senator Rex Patrick has indicated that he will not vote for the Bill in the Senate at this stage.[129] Senator Patrick has said the Bill needs to go to a Senate inquiry, reportedly expressing concern about the lack of national standards, resourcing for states and territories to deal with additional responsibilities and a lack of federal oversight of a devolved approval process.[130]

Senator Lambie

Senator Jacqui Lambie has indicated that she wants to see the final report of the EPBC Act review before making a decision.[131]

One Nation

At the time of writing, One Nation Senators do not appear to have directly commented on the Bill.

Position of major interest groups

Conservation groups

Conservation groups do not support the Bill. For example, the Australian Conservation Foundation (ACF) described the Bill as a ‘backward step that would create a regulatory mess of accreditation with no national standards embedded in law’.[132] The ACF considered that the Bill ‘makes the EPBC Act more complex’ and ‘reduces oversight of important environmental matters’.[133] ACF suggested:

National safeguards for our environment are important because the federal government has responsibilities to protect nationally and internationally recognised ecosystems like the Great Barrier Reef and Kakadu and much-loved threatened wildlife like the koala.[134]

Similarly, the Wilderness Society noted that much of the Bill is ‘word-for-word identical to Tony Abbott’s failed 2014 one-stop-shop amendments’ and noted that it had been ‘expected that this Bill would enshrine environmental standards before handing over powers to the states, but again the promised protections have not been delivered.’[135] The Society called on the Parliament ‘to resist the government’s efforts to rush this bill through, and insist on a full package of reforms that will ensure our environment laws are enforced and effective at turning around Australia’s extinction crisis’.[136]

WWF-Australia has described the Bill as a ‘recipe for extinction’, because it doesn’t address concerns raised in the independent review of the EPBC Act. WWF-Australia expressed concern that the Bill ‘would see federal approval powers handed over to states and territories’, but ‘in its current form lacks standards to help determine the strength of protection being afforded to nature, and lacks a commitment to ensuring independent compliance’.[137]

The Environmental Defenders Office (EDO) has expressed concern that the Bill is being ‘pushed through parliament’ before the 10 year review of the EPBC Act is finalised. The EDO considers that the Bill ‘fails to include key elements for reform suggested in Graeme Samuel’s Interim Report’, including ‘no mention of national environmental standards’ which is ‘a critical foundation of reform’ nor of an independent compliance and enforcement regulator.[138] The EDO has also released a report which audited state and territory legislation and concluded that ‘no state or territory legislation met the full suite of existing national environmental standards required to protect matters of national environmental significance’.[139]

The Humane Society International has expressed concern that the Bill hands over federal government responsibilities to states and territories ‘who are ill equipped for the job, with no provision for enforceable standards, no safeguards, no additional resources and no independent regulator’.[140]

Birdlife Australia considers that the Bill weakens ‘our national nature laws’ and ‘breaks faith with submissions from 30,000 Australians and the full findings of the EPBC review’.[141] It suggested that ‘after the devastation of last summer's bushfires we need stronger laws, not weaker ones, to better protect our natural heritage and the unique and irreplaceable wildlife’.[142]

Several conservation groups have also written to the Director-General of the United Nations Educational, Scientific and Cultural Organization (UNESCO), warning the international body of ‘alarming moves by the Australian Government to weaken legal protection for Australia’s 20 World Heritage listed properties’.[143] The letter advises the UNESCO Director-General that the Morrison Government ‘is rushing a bill through the Australian Parliament that would hand its national development approval powers’ to state and territory governments.[144]

Industry groups

At the time of writing, industry groups do not appear to have directly commented on the Bill itself. However, as noted in the ‘Background’ section of this Digest, industry groups have for many years been calling for reduced complexity and duplication between Commonwealth and state and territory approval processes, which they consider causes additional delays and costs for proponents of relevant projects. Several industry groups have also welcomed and commented on the EPBC Act review Interim Report.[145]

For example, the Minerals Council of Australia (MCA) has stated:

Reforms to the operation of the EPBC Act are needed to address unnecessary duplication and complexity identified in the independent review interim report. Reforms should provide greater certainty for businesses and the community while achieving sound environmental outcomes.

…

The MCA supports the interim report recommendation to establish national outcomes-based standards under the EPBC Act and devolution of Commonwealth environmental assessment and approvals requirements to the states and territories. The MCA also supports the commitment of national cabinet to progress bilateral agreements between the Commonwealth and all states and territories that would enable this devolution.

The MCA recommends the national standards and regulatory architecture to support these agreements be carefully developed to ensure they can be practically applied.[146]

At the same time, the Minerals Council has cautioned that the department or body that has carriage of the assessment and approval processes ‘must have the right amount of resources’.[147]

Similarly, the Australian Petroleum Production & Exploration Association (APPEA) welcomed the report, including the recommendation for consistent national environmental standards:

Overlapping requirements between states and the Commonwealth and widespread duplication of processes between the Commonwealth and states do not help to protect the environment but often causes unnecessary delays increasing the costs for development.

… the report’s intention to establish clear national environmental standards focused on outcome rather than process, will provide greater flexibility when circumstances change while ensuring environmental protection is maintained. [148]

The National Farmers’ Federation noted that it has ‘been seeking reform of the EPBC Act for more than a decade’ and noted the Interim Report had made a number of ‘salient recommendations’ including ‘that legally enforceable national environmental standards be granular and focus on outcomes’ and ‘devolution of assessments and approvals to willing states’.[149]

Law Council

The Law Council of Australia has suggested that the Bill should ‘not be rushed through the Senate’ and has called for its referral to a parliamentary inquiry.[150] The Law Council reiterated its ‘longstanding view’ that ‘the Commonwealth should be demonstrating leadership in biodiversity conservation and environmental protection’. The Law Council stated:

Bilateral agreements should not operate without robust and comprehensive Commonwealth oversight which is necessary to ensure that the Australia’s obligations under international treaties are met and public confidence and trust is maintained.[151]

The Law Council called for a ‘strong assurance framework that clearly demonstrates how the Commonwealth Government will ensure that its obligations under international law will be met’.[152] The Law Council also considered that the independent inquiry should complete its final report ‘before embarking on this significant change’.[153]

Financial implications

According to the Explanatory Memorandum:

… the Bill will not have direct financial impacts; however, the reforms will result in regulatory savings for business, including a reduction on administrative and delay costs associated with two separate approval processes.[154]

The Minister has also reportedly indicated that the Bill ‘does not involve additional funding for the states’.[155] However, the ACT Government has reportedly stated that it will be requesting additional funding from the Commonwealth as part of bilateral agreement negotiations because ‘additional work will need to be resourced if responsibility for EPBC approvals is transferred’.[156]

The recent Commonwealth Budget included an additional $10.6 million over two years to progress negotiations with the states and territories on bilateral agreements to accredit states to carry out environmental approvals for Commonwealth matters.[157]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[158]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights had no comment on the Bill.[159]

Key issues and provisions

The Environment Minister has indicated that the Bill is:

… the first step towards implementing the national cabinet decision of 24 July 2020, where all states and territories agreed in principle to adopt reforms to move towards a single-touch approach to environmental approvals.[160]

As noted earlier in this Digest, the EPBC Act already contains provisions for approval bilateral agreements which allow the Commonwealth to accredit state and territory approval processes. The Bill proposes to amend related provisions in the EPBC Act to ensure ‘legally robust devolution of environmental approvals to the states and territories’, with the aim of removing duplication with state and territory processes.[161] In her second reading speech, the Environment Minister suggested that this duplication ‘adds unnecessary regulatory burden which delays job-creating projects and impedes economic activity, and creates uncertainty around environmental protections.’[162] As noted earlier in this Digest, industry groups have for many years called for measures to remedy duplication between the EPBC Act and state and territory approval processes. However, conservation groups have expressed concern about the Commonwealth devolving its responsibilities to the states and territories and consider that the Commonwealth should provide strong leadership on environmental matters, particularly in relation to Australia’s obligations under international environmental agreements.

In her second reading speech, the Environment Minister also described the Bill as ‘the first tranche of EPBC Act reforms linked to the independent statutory review of the Act’.[163] However, as discussed earlier in this Digest, several stakeholders, including conservation groups and the Law Council of Australia, are concerned that the Bill is being rushed through Parliament before finalisation of the independent statutory review.[164] They expressed concern that the Bill simply replicates a 2014 Bill and does not address key recommendations in the Interim Report, particularly the development of national environmental standards prior to the delegation of approval powers to states and territories.[165] As also noted earlier in this Digest, both environment and industry groups supported the Interim Report’s recommendation for clear national environmental standards.

In this context, the Department advised a Senate Committee inquiry that it provided initial drafting instructions relating to the Bill to the Office of Parliamentary Counsel on 19 June 2020, prior to the National Cabinet decision on 24 July, and before the Interim Report of the EPBC Act review was received by the Government on 30 June.[166]

Referrals

Currently, under section 68 of the EPBC Act, a person proposing to take an action that the person thinks is, or may be, a controlled action must refer the proposal to the Minister. As outlined earlier in this Digest, a ‘controlled action’ is an action which will have, or is likely to have, a significant impact on a matter of national environmental significance.[167] Once an action is referred, the Minister then makes a decision under the EPBC Act as to whether or not approval is needed to take the action.[168]

Section 29 in Part 4 of the EPBC Act provides that actions taken in accordance with an accredited management arrangement or authorisation process under an approval bilateral agreement will not require the approval of the Commonwealth Environment Minister. This effectively means that actions covered by approval bilateral agreements in this way are not ‘controlled actions’ under the definition in section 67, because taking the action without approval is not prohibited under the relevant provisions of the EPBC Act.[169] In turn, this means such actions do not need to be referred to the Minister.

The simplified outline in section 66 of the EPBC Act confirms this by stating that actions covered by approval bilateral agreements are not covered by Chapter 4 of the EPBC Act. Chapter 4 contains provisions relating to the environmental assessment and approval process, including the referral process.

However, as the Explanatory Memorandum states, ‘there is currently nothing in the Act to prevent a person from referring an action to the Minister’ that is otherwise covered by the scope of an approval bilateral agreement, even though it is unnecessary.[170] In particular, subsection 68(2) provides that a person proposing to take an action that the person thinks is not a controlled action may still refer the proposal to the Minister.

As such, the amendments in this Schedule aim to ‘reduce duplication by clarifying the intended operation of the Act, as stated in section 66’.[171]

Item 2 of Schedule 1 of the Bill inserts proposed section 66A to clarify that proponents will not need, or be able, to refer an action to the Commonwealth where the action is approved under an approval bilateral agreement; or where an action is being, or will be, assessed under an approval bilateral agreement and an approval decision has not yet been made in accordance with that agreement.

Proposed subsection 66A(3) provides that if an approval bilateral agreement is suspended generally or suspended in relation to actions in a specified class and the proposed action falls into that class, then the action may be referred to the Commonwealth Minister for the Environment.

Where an action is to be taken in two or more states or self-governing territories, proposed subsection 66A(4) provides that proposed section 66A does not operate unless the section operates in each of the relevant states or territories. In this case, the proposed action may be referred to the Commonwealth.[172]

The remainder of items in Schedule 1 are consequential to proposed section 66A.

Completing assessments

The amendments in Schedule 2 of the Bill aim to enable assessment and approval of an action under the EPBC Act to be completed in certain situations, such as where a bilateral agreement is suspended or cancelled,[173] or where an approval bilateral agreement otherwise ceases to apply to a particular action. In this context, the Explanatory Memorandum states:

It is expected that an approval bilateral agreement will include provisions allowing the Minister, or a State or Territory Minister, to declare that a particular action is no longer within a class of actions to which the approval bilateral agreement relates. These provisions would operate to allow the Minister to ‘call-in’ an action for assessment and/or approval under the Act in circumstances where it is appropriate that the Commonwealth approve the action. For example, the Minister may call-in an action covered by an approval bilateral agreement if adequate environmental protection is not being achieved.[174]

As outlined earlier in this Digest, the EPBC Act review Interim Report identified amendments to enable the Commonwealth to complete an assessment and approval if a state or territory is unable to as one of the ‘important amendments’ needed to provide a ‘more enduring framework for devolution’ of Commonwealth approval powers to states and territories.[175]

Deemed referrals

Item 3 of Schedule 2 inserts proposed section 69A which provides for ‘deemed referrals’. Proposed section 69A applies where the Commonwealth Environment Minister,[176] or the relevant state or territory minister, makes a declaration under an approval bilateral agreement that a specified action is no longer covered by the agreement (an ‘exclusion declaration’). If an exclusion declaration is made, then the person proposing to take the action is deemed to have referred the proposal to the Commonwealth Environment Minister at the time the exclusion declaration is made.

Proposed subsection 69A(4) and section 69B modify certain requirements relating to the referral, including the publication and consultation requirements, as follows:

• the person taken to have referred the action does not have to state whether they think that an action is a controlled action (proposed subsection 69A(4))
• the requirements in section 72 about the way in which a referral must be made, and the information a referral must include, will not apply (proposed subsection 69A(4))
• the requirement for the Commonwealth Environment Minister to invite comments from other Commonwealth Ministers or the appropriate state or territory minister under subsections 74(1) and 74(2) will be discretionary (proposed paragraph 69B(a))
• the Commonwealth Environment Minister will only be required to publish the exclusion declaration, rather than the referral itself (proposed paragraph 69B(b)) and
• unlike the requirements for other referrals,[177] the Commonwealth Environment Minister will not be required to invite public comments on whether an action to which an exclusion declaration relates is a controlled action, although the Minister will have a discretion as to whether to invite such comments (proposed paragraph 69B(b)). The Explanatory Memorandum suggests that ‘providing the Minister with this discretion will avoid duplicating processes that may have already been undertaken’ by a state or territory.[178] However, the Minister can decide not to invite comments on the referral, even where a state or territory has not undertaken any consultation.

Partially completed state or territory assessments

Currently, if the Minister has decided under the EPBC Act that an action is a ‘controlled action’, then that action is assessed under Part 8 of the EPBC Act (unless it is covered by an assessment bilateral agreement). The Commonwealth Environment Minister decides on the appropriate level of assessment for that action under section 87 of the EPBC Act.[179]

Subsection 87(3) currently sets out a range of matters that the Minister must consider when making this assessment approach decision. Item 6 of Schedule 2 inserts proposed paragraph 87(3)(ca) to include an additional matter for the Minister to consider in situations where an action is deemed to have been referred to the Commonwealth (under proposed subsection 69A(2)), or if a bilateral agreement is suspended or cancelled, and a state or territory has partially completed an assessment of the relevant impacts of the action. In these circumstances, the Minister must consider the extent to which a partially completed assessment of the action by the state or territory can be used, and the assessment completed, under the EPBC Act.

If a state or territory has partially completed an assessment of the relevant impacts of an action, and the Minister decides to complete that assessment under the EPBC Act, item 9 inserts proposed subsection 87(7) to require the Minister to make a determination on:

• which steps of the state or territory assessment process are to be used for the purposes of assessing the relevant impacts of the action and
• the remaining steps to be carried out to complete the assessment.[180]

The Explanatory Memorandum states that these provisions are needed because state and territory assessment processes will differ, and may not necessarily align with the steps under the various assessment approaches under Part 8 of the EPBC Act.[181]

The Minister is required to publish a notice of his or her decision on the assessment approach under section 91 of the EPBC Act. Item 11 inserts proposed subsection 91(3) to clarify that if the Minister makes a determination under proposed subsection 87(7), the assessment approach decision notice under section 91 must also specify which steps of the state or territory assessment process are to be used and which steps are to be carried out under a Part 8 assessment process.

One of the assessment approaches provided for in the EPBC Act is an ‘accredited assessment process’, which enables case-by-case accreditation of a Commonwealth, state or territory assessment process. This can already be used in situations where, for example, a bilateral agreement is not in operation in a state or territory, or an action is not covered by a bilateral agreement. Subsection 87(4) sets out the matters that the Minister must be satisfied of before deciding on an assessment by an accredited process. However, currently, accreditation of a Commonwealth, state or territory assessment process can only occur where the assessment has not yet commenced. Items 7 and 8 of Schedule 2 amend paragraphs 87(4)(a) and 87(4)(c) respectively to provide the Minister with the option of deciding that the assessment approach that will be used for a particular action will be an ‘accredited assessment process’ where part or all of that assessment has already been completed. The Explanatory Memorandum notes:

To make the decision, the Minister will need to be satisfied that the process has been, or is being, carried out under a law of the Commonwealth, a State or self-governing Territory, and that there has been, or will be, an adequate assessment of the relevant impacts of the action under the process.[182]

Declaring a state or territory assessment as an assessment

Item 10 of Schedule 2 inserts proposed sections 87A and 87B into the EPBC Act.

Proposed section 87A enables the Commonwealth Minister to make a determination that an assessment by the state or territory under a bilateral agreement is an assessment for the purposes of the EPBC Act in certain situations. That is, where an action has been deemed to have been referred under proposed subsection 69A(2), the Minister has decided that the action is a controlled action, and a state or territory has completed an assessment of the impacts. This would allow the Minister to then make a decision on whether or not to approve the action under the EPBC Act.[183]

Proposed section 87B similarly enables the Minister to make a determination that an assessment by the state or territory under a bilateral agreement is an assessment for the purposes of the EPBC Act, in situations where the assessment bilateral agreement has been suspended or cancelled but the action has not yet been approved by the state or territory.

Item 12 amends section 130 to set a 40 business day timeframe within which the Minister must decide whether to approve the taking of the action if the Minister has made a determination under proposed sections 87A or 87B. This is broadly consistent with the other decision-making timeframes currently set out in section 130.

Application of Schedule 2 amendments

Item 17 provides that the amendments in Schedule 2 will apply to actions that:

• have been assessed by a state or territory before the amendments commence
• are being assessed by a state or territory on the day the amendments commence or
• will be assessed by a state or territory on or after the day the amendments commence.

Approval bilateral agreements and the water trigger

The amendments in Part 1 of Schedule 3 of the Bill propose to enable approval bilateral agreements to cover the water trigger under the EPBC Act. Currently, sections 24D and 24E of the EPBC Act provide that actions involving a coal seam gas development or a large coal mining development require assessment and approval under the EPBC Act if they have, will have, or are likely to have, a significant impact on water resources. As noted earlier, this is also known as the ‘water trigger’.[184]

When this water trigger was added to the EPBC Act in 2013,[185] Parliament agreed to amendments by Independent MP Tony Windsor which prevented approval bilateral agreements from covering the water trigger: that is, the Commonwealth could not give a state or territory responsibility for approving relevant developments under the water trigger.[186] As a result, the water trigger is the only matter of national environmental significance that cannot currently be the subject of an approval bilateral agreement.

Items 1 and 2 of Schedule 3 amend subsections 29(1), 46(2) and 46(2A) to remove this restriction, which will allow a bilateral agreement to declare that actions involving coal seam gas or large coal mining developments which have, will have or are likely to have, a significant impact on water resources are actions within a class of action that do not require approval under the EPBC Act.[187]

Note that the Bill does not remove the water trigger itself, but rather allows the Minister to devolve responsibility to states and territories to make approval decisions relating to large coal mining and coal seam gas developments that are likely to have a significant impact on a water resource.

The issues of the water trigger and approval bilateral agreements were one of the more divisive aspects of the previous 2014 Bill.[188] Industry groups have argued for some time that the water trigger duplicates state-based water regulatory frameworks and should be removed altogether.[189] In contrast, conservation organisations and others suggest the water trigger should be expanded to other unconventional gas developments and oppose handing over approval powers relating to the water trigger to the states and territories.[190]

The 2017 review of the water trigger (mentioned in the ‘Background’ section of this Digest) found that ‘scope should exist’ for approval bilateral agreements to include decisions under the water trigger.[191] To this end, the review recommended that:

… should governments wish to further pursue bilateral approval agreements relating to the water trigger an independent and transparent review be conducted, by a person or persons, acceptable to both the Commonwealth and the states, to undertake an analysis of relevant state regulatory systems, practice and policy. The purpose of the review would be to identify and make recommendations for any changes necessary for each state system to meet the requirements of the water trigger and so form the basis of the water-resource related components of a bilateral approval agreement with the Commonwealth. Such a review should be informed by [Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development] advice.[192]

The Interim Report of the current EPBC Act review proposed that the water trigger be retained, but modified. Relevantly, the report noted that the EPBC Act currently prevents approval decisions related to the water trigger from being devolved to states or territories, and suggested:

Any decision to remove this restriction should be accompanied by the development of a Standard for the protection of water resources.[193]

There is no mention of such a standard in the Bill or the Explanatory Memorandum.

Independent Expert Scientific Committee

Currently, section 131AB of the EPBC Act requires the Minister to obtain, and take into account, the advice of the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC) before deciding whether to approve an action under the water trigger.[194] The IESC was established under the EPBC Act in 2012 to advise state, territory and Commonwealth governments on the potential water-related impacts of proposed coal seam gas or large coal mining developments.[195] The functions of the IESC are set out in section 505D of the EPBC Act.

Item 5 of Schedule 3 inserts proposed subsection 48A(2A) into the EPBC Act to require an approval bilateral agreement that covers actions under the water trigger to include an undertaking from the state or territory that the appropriate state or territory minister obtain, and take into account, any relevant advice from the IESC when deciding whether or not to approve that action.[196] The Explanatory Memorandum states that this will ‘ensure States and Territories are under a similar obligation [to section 131AB] if approval bilateral agreements are entered into’.[197]

Item 5 also inserts proposed subsection 48A(2B) to clarify that an undertaking to obtain and take account of the advice of the IESC does not limit the ability of the state or territory to request advice from the IESC.

Item 6 amends section 505D to provide the IESC with an additional function in proposed paragraph 505D(1)(ba). This paragraph would allow the Commonwealth Minister to request advice from the IESC on coal seam gas and large coal mining developments which are likely to have significant impacts on water resources that are being assessed under a bilateral agreement. This would be supplementary to the IESC’s advice to the state or territory on a particular development.[198] The Explanatory Memorandum states that this supplementary advice:

… could assist the Commonwealth in monitoring the operation of the bilateral agreements. It is likely that this would, in practice, be used with regard to projects that have large potential impacts, or where there is a high degree of uncertainty about potential impacts and/or projects that are subject to significant community concern.[199]

Extending types of accredited authorisation processes

Part 2 of Schedule 3 contains amendments to extend the types of authorisation processes that can be accredited by approval bilateral agreements.

Section 528 of the EPBC Act currently defines an ‘authorisation process’ as a ‘process set out in a law of the Commonwealth or a state or territory under which actions are authorised’. In turn, this means that the Minister can currently only accredit an authorisation process for the purposes of an approval bilateral agreement if it is set out in a ‘law of the relevant state or territory’. However, the Explanatory Memorandum considers that:

The existing definition of authorisation process also does not recognise that States and Territories have set up their environmental approval processes in ways that best reflect their regulatory operating environment.[200]

Item 17 of Part 2 of Schedule 3 of the Bill repeals the definition of ‘authorisation process’ and replaces it with a revised and extended definition which includes a process ‘set out, wholly or partly, in an instrument made under a law of a state or territory’ and a process ‘made, wholly or partly, under a law of a state or territory’.[201] The Explanatory Memorandum states that this will enable to the Minister to:

… accredit processes that are set out in, for example, procedures or guidelines which are made or issued under a State or Territory law, but which are not set out in the State or Territory legislation itself. This will allow for more detailed arrangements which are elements of the authorisation process to be accredited by the Minister.[202]

The proposed Note to the new definition of authorisation process clarifies that the reference to ‘partly’ in the definition means ‘it is sufficient if at least part of the process is set out or made’ under the law or instrument. That is, one component of the process can be administrative, but:

The definition does not include an authorisation process which is entirely made up of administrative components with no statutory basis.[203]

In short, the amendments in Part 2 of Schedule 3 expand the types of authorisation processes that can be accredited for the purposes of an approval bilateral agreement. The Explanatory Memorandum suggests that the purpose of these amendments is to:

… provide flexibility in the range of State and Territory authorisation processes that can be accredited for the purposes of an approval bilateral agreement, and to ensure that the Act focuses appropriately on the content and robustness of the authorisation process, rather than on where the process is set out.[204]

However, the EDO has expressed concern that the Bill ‘allows accreditation of policies not set out in law, not even written yet’.[205] As the Bills Digest for the 2014 Bill observed, these amendments mean:

… the Minister may accredit authorisation processes that are set out in, for example, procedures or guidelines which are made or issued under state or territory law, but which are not set out in the state or territory legislation itself, provided they meet appropriate Commonwealth standards for assessing and approving actions. Thus, this would enable other entities such as ‘expert panels’ or local councils in their role in approving development projects to potentially be the authorising entities for an approvals bilateral agreement. Given the number of local councils that this may have implications for within jurisdictions, it may represent a challenge in terms of transparency and accountability. This may be a significant issue as it is unclear that local councils have the expertise, or are sufficiently equipped, to manage the cumulative impacts of development that may cause long term damage to land.[206]

Subsection 46(3) of the EPBC Act will still require the Minister to be satisfied of certain matters before accrediting an authorisation process.[207] These matters include:

• the authorisation process meets any criteria prescribed by the Regulations (however, see below on this issue)[208]
• there has been or will be adequate assessment of the impacts that actions approved in accordance with the authorisation process have or will have, or are likely to have, on each matter protected by a provision of Part 3 that relate to the agreement[209] and
• actions approved in accordance with the authorisation process will not have unacceptable or unsustainable impacts on a matter protected by a provision of Part 3.[210]

No criteria required for management arrangements or authorisation processes

Item 11 in Schedule 3 contains what appears to be the only notable difference between this Bill and the 2014 Bill (including proposed Government amendments to the 2014 Bill).

Paragraph 46(3)(a) currently requires a management arrangement or authorisation process (and the law under which it is in force or set out) to meet the criteria prescribed by the Regulations. Item 11 amends paragraph 46(3)(a), ostensibly to ‘ensure the Minister is able to accredit all components of a state or territory authorisation process being considered for accreditation’.[211] In doing so, item 11 inserts the words ‘if any’ after criteria to clarify that the Regulations can be made, but do not need to be made, to prescribe criteria for the authorisation process or management arrangement to meet. Although proposed Government amendments to the 2014 Bill contained an amendment similar to item 11, that amendment did not contain the words ‘if any’.[212]

Under the current drafting of the EPBC Act, it is not entirely clear what the effect would be if no Regulations prescribing relevant criteria were made. Courts have considered the effect of a failure to make Regulations when an Act says that a subject matter is to be ‘as prescribed’ and have generally found that the effect depends on the nature of the matter that is to be prescribed.[213] In many cases, it has been found that Regulations were not necessary.[214] As such, it is possible that inserting the words ‘if any’ into paragraph 46(3)(a) may merely be confirming and clarifying that there is no need to make Regulations prescribing criteria.

Nonetheless, as noted earlier in this Digest, the EPBC Act review Interim Report recommended that clear and enforceable environmental standards be prescribed in Regulations prior to the devolution of approval powers to the states. As such, Parliament may wish to note that, not only have no such standards been published alongside the Bill, but the Bill contains amendments to clarify that there is actually no requirement for any additional criteria or standards to be prescribed prior to the accreditation of a state or territory arrangement or process.

Minor changes to accredited processes

Section 56A of the EPBC Act currently sets out a process for minor amendments to a bilateral agreement if the Minister is satisfied that the amendment will not have a significant effect on the operation of the agreement. However, as the Explanatory Memorandum states, the EPBC Act:

… does not currently include a process for dealing with minor changes to a management arrangement or authorisation processes accredited under an approval bilateral agreement or minor changes to the specified manner of assessment under an assessment bilateral agreement.[215]

As outlined earlier in this Digest, the EPBC Act review Interim Report identified amendments to ensure agreements can endure minor amendments to state and territory settings, rather than requiring the bilateral agreement to be remade, as one of the ‘important amendments’ needed to provide a ‘more enduring framework for devolution’ of Commonwealth approval powers to states and territories.[216]

Items 1 and 2 of Schedule 4 of the Bill insert proposed sections 46A and 47A respectively to apply to situations where a state or territory amends:

• a bilaterally accredited management arrangement or a bilaterally accredited authorisation process under an approval bilateral agreement (proposed section 46A) and
• the specified manner in which actions are assessed for the purposes of an assessment bilateral agreement (proposed section 47A).[217]

In these situations, the Commonwealth Minister for the Environment will be able to make a written determination that:

• an amended management arrangement or authorisation process continues to be accredited under an approval bilateral agreement without the need to amend the approval bilateral agreement or reaccredit the process or arrangement (proposed subsection 46A(2)) or
• the amended manner of assessing actions continues to be the specified manner of assessment for the purposes of an assessment bilateral agreement (proposed subsection 47A(2)).[218]

However, before the Minister makes the determination, proposed subsections 46A(2) and 47A(2) require that the Minister must be satisfied that:

• the amendment will not have, or is not likely to have, a material adverse impact on a matter protected by Part 3
• the amendment would not be likely to have a material adverse effect on a person’s ability to participate in the relevant process (provided for by the accredited arrangement or process) and
• the process or management arrangement continues to meet the existing requirements in the EPBC Act, such as:
  • providing for an adequate assessment of the relevant impacts of the action and
  • actions approved will not have unacceptable or unsustainable impacts on a relevant matter protected by Part 3 of the EPBC Act.

As the Explanatory Memorandum notes, if the Minister considers that a change would have a material adverse impact on a protected matter or a material adverse effect on person’s ability to participate in the process, the Minister would need to follow the process in Part 5 of the Act. This would include public consultation on the amended bilateral agreement, and tabling of the process or arrangement in Parliament.[219]

The Explanatory Memorandum gives the following examples of what might be considered ‘minor changes’ to a bilaterally accredited management arrangement or authorisation process:

• minor changes to public consultation requirements, including increases and decreases to the time available (as long as the changed requirements continue to satisfy the relevant criteria)
• revisions to requirements for the content of assessment documentation, such as to the required information on potential impacts (where the changes would continue to satisfy the relevant criteria) or additional information to be included in the environmental assessment report under an accredited process (such as alternatives for avoiding environmental impacts)
• including additional requirements relating to procedural fairness and
• administrative procedures made under a state law which may be made each calendar year.[220]

During the Senate inquiry into the 2014 Bill, several organisations raised concerns that the proposed amendments in Schedule 4 could result in amendments being made without public participation and parliamentary oversight.[221]

Broader range of entities to approve actions under bilateral agreements

In relation to approval bilateral agreements, subsection 46(1) of the EPBC Act currently refers to actions that have been approved by the state or territory that is party to the agreement, or a state or territory agency. As the Explanatory Memorandum states:

This means that if the entity making a decision under an accredited management arrangement or authorisation process is not the State or Territory, or an agency of the State or Territory, the class of actions declaration in the approval bilateral agreement will not apply to decisions made by that entity. As a result, the action will no longer be covered by the approval bilateral agreement and will need a separate approval under the Act. [222]

In other words, the Commonwealth can currently only enter into approval bilateral agreement to accredit actions approved by a state or territory or an agency of a state or territory, but not actions approved by other entities which may fall outside the definition of ‘agency of a state or territory’.[223] The Explanatory Memorandum suggests that this includes some local governments and other expert bodies in some states, and as such the current wording could ‘lead to an outcome where the decision of a body reviewing an approval under an accredited arrangement or process would itself fall outside the scope of the arrangement or process’.[224]

Item 1 of Schedule 5 of the Bill proposes to repeal and replace subsection 46(1) of the EPBC Act to overcome this issue by removing the reference to approval by the state or territory (or a state or territory agency). The Explanatory Memorandum suggests this means that the focus is on the approval bilateral agreement and whether the relevant arrangement or process satisfies the criteria for accreditation, rather than the identity of the decision maker.[225]

Item 1 also inserts a new note to subsection 46(1) to clarify that an action may be approved in accordance with an accredited arrangement or process before the accreditation of that arrangement or process for the purposes of an approval bilateral agreement.

Concerns were raised in relation to the same provisions in the 2014 Bill. These concerns centred on the capacity of authorised persons to act in the national interest, potential conflicts of interest and the consequential negative impacts to the maintenance of strong environmental standards.[226]

Other amendments

Accreditation considerations

Subsection 46(3) currently requires the Minister to be satisfied of certain matters before accrediting a management arrangement or an authorisation process for the purposes of an approval bilateral agreement. Item 6 of Schedule 5 inserts a proposed paragraph 46(3)(d) which enables the Minister to consider ‘any other matter that the Minister considers relevant’ when deciding whether to accredit a management arrangement or authorisation process. Item 8 inserts a related new note to subsection 46(3) which suggests that matters that the Minister might consider relevant may include, for example, the terms of the bilateral agreement or State policies or plans.

The Explanatory Memorandum suggests:

For example, the State or Territory may commit to processes or environmental protection requirements in a bilateral agreement, or set out guidance in policies as to how decision-makers should exercise discretion under State or Territory processes, and this may be relevant to the Minister being satisfied that the authorisation process will not have unacceptable or unsustainable impacts. New paragraph 46(3)(d) would enable this information to be taken into account in deciding whether or not to accredit a management arrangement or authorisation process.[227]

As the Explanatory Memorandum also observes, subsection 45(4) currently requires the Minister to publish a statement of reasons for entering into the bilateral agreement at the time the Minister publishes the finalised agreement, which documents ‘all matters that the Minister considered when deciding to accredit a management arrangement or an authorisation process’.[228] This would include any matters considered under proposed paragraph 46(3)(d).[229]

Bilateral agreements and current versions of instrument and policy documents

Item 9 of Schedule 5 inserts proposed section 48AA into the EPBC Act to provide that a bilateral agreement may ‘apply, adopt or incorporate’ an instrument or other writing as in force or existing from time to time, even if it does not yet exist when the agreement is entered into.  The operation of section 46AA of the Acts Interpretation Act 1901, and the current provisions of the EPBC Act, mean that bilateral agreements may only apply, adopt or incorporate documents or other instruments (other than Commonwealth Acts or legislative instruments) that are in force at a particular time (for example, at the time of, or before, the making of a bilateral agreement).[230] However, currently, bilateral agreements may not apply, adopt or incorporate documents or other instruments as in force from time to time.[231]

The aim of proposed section 48AA is therefore to ensure that the operation of a bilateral agreement is preserved when instruments and policy documents are updated, rather than requiring the agreements to be amended each time the relevant instrument or document is updated.[232] As discussed earlier in this Digest, the Scrutiny of Bills Committee has requested more detailed advice from the Minister as to the type of documents that may be applied, adopted or incorporated by reference under proposed section 48AA and whether these documents will be freely available to all interested persons.[233]

Concluding comments

This Bill largely replicates a Bill introduced into Parliament in 2014 to facilitate the devolution of environmental approval powers to state and territory governments. The Bill does not incorporate many of the recommendations made by the Interim Report of the current review of the EPBC Act, including that national environmental standards be developed to support the devolution of environmental approval powers to state and territory governments. Some stakeholders consider that it is premature to amend the EPBC Act prior to the finalisation of the current ten year statutory review of the EBPC Act, which is due to report in October this year.