Chapter 5Environmental assessments and approvals
Introduction
5.1For the proposed Middle Arm Industrial Precinct to proceed, both the Australian and Northern Territory (NT) Governments must complete separate environmental impact assessments and give Ministerial-level approvals.
5.2This chapter outlines the distinctions between the Commonwealth and Territory approvals processes, then examines the key concerns raised by submitters in relation to these approvals.
5.3At time of writing, both the Australian and NT Government assessments were underway and being carried out in a coordinated manner.
Commonwealth strategic environmental assessment
5.4Broadly, the Australian Government is concerned with understanding the development’s potential impacts on Matters of National Environmental Significance (MNES).
5.5At the Commonwealth level, under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), any new development that is likely to have a significant impact on MNES must be approved by the Federal Minister for the Environment and Water (Federal Environment Minister).
5.6The EPBC Act offers two pathways to achieve approval for projects that are likely to have a significant impact on MNES. The first and more common pathway is the referral, assessment, and approval process (known as ‘project-by-project’ assessments). The second is the ‘strategic assessment’ process.
5.7‘Project-by-project’ assessments consider the potential impacts of individual developments on MNES. They relate to the actions of a single proponent and provide an assessment process for one project at a time.
5.8‘Strategic assessments’ are a landscape scale assessment, and, unlike project-by-project assessments, consider a much broader set of issues. Strategic assessments offer the opportunity to examine, and potentially approve, a series of new proposals or developments over a much larger geographic scale and timeframe and are possible even if the developer is currently not known.
5.9According to the Department of Climate Change, Energy, the Environment and Water (DCCEEW), the strategic assessment process is a flexible one that is designed to be a collaboration between the Australian Government and the nominated Strategic Assessment Partner. In this case, it is the NT Government, and specifically, the NT Department of Infrastructure, Planning and Logistics (DIPL). That said, there are a set of legislative and non-legislative steps that must be followed. These are set out in Figure 6.1 and further explained below.
Step 1—Strategic Assessment Agreement and Terms of Reference
5.10On 31 March 2022, the former Chief Minister of the NT and the former Federal Minister for the Environment agreed to conduct a strategic assessment of the proposed Middle Arm Industrial Precinct. The Strategic Assessment Agreement (the Agreement) establishes an assessment of the impacts of adopting or implementing a Program of activities (explained below). It establishes how the assessment process will be undertaken and establishes the roles and responsibilities of all parties.
5.11The Agreement:
requires the NT Government to develop a Program of activities to occur at Middle Arm, in accordance with endorsement criteria to guide the Environment Minister’s decision.
requires DCCEEW to develop Terms of Reference for an Environmental Impact Statement (EIS). This MNES EIS (explained later) will be developed by NT Government and assess the impacts of implementing the Program.
Figure 5.1Strategic Assessment Process
Source: DCCEEW, Submission 201, p. 13.
5.12The MNES EIS Terms of Reference requires the NT Government to explain:
the conservation outcomes and commitments to be delivered for MNES including measures to avoid, mitigate and offset the impacts of implementing the Program.
how the environmental outcomes and commitments will effectively manage, and conserve MNES for the life of the Program.
the legal and administrative frameworks to implement and ensure compliance with the Program, and the persons and authorities responsible for the implementation of and compliance with the Program.
how adaptation to reasonable climate change scenarios has been considered and what (if any) effect this would have on the outcome for MNES.
Step 2—Preparation of a draft Program
5.13The draft Program must describe what the NT DIPL is seeking approval for, that is, the scope of future development and sustainability outcomes at the precinct and what must happen at the site under any future strategic approval.
5.14An initial version of the draft Program was released in 2022. The final version of the draft Program is under development by the NT DIPL. According to the NT Government, this is because, while some ‘early fundamentals about the MASDP [Middle Arm Sustainable Development Precinct] Program are currently known’, a ‘considerable amount of information, analysis and consultation must still be undertaken to fully develop the Program’.
5.15The draft Program will identify:
areas for development;
classes of action proposed for the Middle Arm Industrial Precinct, including how they are to be regulated and/or managed under Territory legislative requirements (these requirements are explained in the following section);
outcomes and commitments for the conservation of protected matters, based on the ‘avoid, mitigate and offset’ hierarchy of principles;
outcomes and commitments for governments and third-party developers;
an implementation framework that describes how the Program will be efficiently and effectively implemented;
an assurance framework that describes how the approval holder will demonstrate and adaptively manage the effectiveness of proposed regulatory, administrative and protected matter outcomes.
Step 3 - Preparation of a draft EIS
5.16The NT Government is preparing a single draft EIS which addresses not only MNES requirements but the requirements of NT environmental legislation. This draft EIS will assess the impacts of implementing the Program on MNES.
5.17The (comprehensive) draft Program and draft EIS are expected to be made available for public consultation in the second half of 2024.
5.18The NT Government will provide the draft Program and draft EIS to DCCEEW for comment. DCCEEW will determine whether the draft EIS adequately addresses the cumulative impacts to MNES (including related social and economic impacts, discussed below) of implementing the Program. This will extend to whether avoidance, mitigation, and offset measures are suitable. The NT Government may be required to revise the draft documents to address the department’s concerns.
Step 4 - Public consultation on the draft Program and draft EIS
5.19Once satisfied that the draft Program and the draft MNES EIS have met the Terms of Reference, the Federal Environment Minister may make a decision to direct the NT Government to invite public comment on the draft documents.
5.20As mentioned, the draft Program and draft EIS are expected at the end of 2024 and must be made available for public consultation for at least 28 days.
5.21The NT Government must consider public comments received, and whether changes are required to the draft documents. It must then submit to DCCEEW a copy of all comments, revised versions of the draft Program and draft EIS, and a Supplementary EIS (if applicable) which explains how changes to the documents have addressed public comments.
5.22The Strategic Assessment Parties work together to develop the Program and EIS in relation to EPBC Act requirements.
5.23If, after consideration of public comments on the draft documents, either of the Strategic Assessment Parties considers that significant changes to the draft Program or draft EIS are required, further public consultation may be undertaken.
5.24Following consideration by DCCEEW, the Federal Environment Minister may request further changes to the draft Program or additional information to inform a decision on whether to endorse the Program.
Step 5 - Submission of final EIS and Program for endorsement
5.25The NT Government must submit to the Australian Government a final Program and EIS. For DCCEEW to recommend endorsement by the Federal Environment Minister, the Program must ensure that any potential impacts to MNES are acceptable.
5.26Before deciding whether to endorse the Program, the Federal Environment Minister must be satisfied that the EIS adequately addresses potential impacts to MNES and public feedback received. The Program, if endorsed and approved, will enable economic development and environmental protection up to the next 50 years.
5.27Upon making a decision to approve the taking of actions in accordance with the endorsed Program, the Federal Environment Minister must also consider social and economic matters. Indeed, in the Strategic Assessment Agreement, the Australian and NT Governments acknowledged that the proposed development area ‘has significant environmental values that must be considered alongside the economic and social benefits of development in the region’.
5.28Once a Program has been endorsed by the Federal Environment Minister, the NT Government and the other identified site users, may commence the approved action. This is subject to the NT government process and any approvals required under other Territory legislation.
5.29The Federal Environment Minister may also approve ‘classes of actions’ in accordance with the endorsed Program. In making this approval decision, the Federal Environment Minister must be satisfied that impacts to MNES are acceptable and consider related social and economic matters. The Federal Environment Minister may also attach conditions to the approval, which will appear in the published approval notice.
Step 6 - Implementation of the Program
5.30The NT Government will be responsible for implementing the Program and adhering to any approval conditions or reporting requirements under both the EPBC Act and NT Environment Protection Authority (NT EPA) approvals (explained below). Actions may only be undertaken in accordance with the Program, and any approval conditions. Both the final EIS and final Program must be made publicly available for the life of the endorsed Program and class of actions approval.
Implications of the Strategic Assessment
5.31The implications of the EPBC Act Strategic Assessment process for the Middle Arm Industrial Precinct are that, if the proponent cannot demonstrate that potential impacts to MNES can be managed to an acceptable level, for the life of the Program, through the EIS, then the Federal Environment Minister may not endorse the Program and approve classes of actions that may be undertaken in accordance with that Program.
5.32If the Federal Environment Minister does endorse the Program and approve classes of actions, identified projects within the Middle Arm Industrial Precinct will have certainty regarding their environmental obligations throughout their construction and operational phases. These projects will be subject to ongoing monitoring and reporting, and requirements to continue to manage impacts to an acceptable level for the life of the Program.
5.33According to DCCEEW, only activities captured within the endorsed Program and given a class of actions approval will be able to operate under the Strategic Assessment. Any other activities within the Middle Arm Industrial Precinct will need to comply with their obligations under the EPBC Act and refer for assessment any activity that is known or likely to have a significant impact on a MNES.
5.34Regardless of the Strategic Assessment process or outcome, a discrete project within the footprint of the Middle Arm Industrial Precinct can still be referred to DCCEEW for consideration.
Advantages of using a Strategic Assessment
5.35In its submission, DCCEEW explained the advantages of using a strategic assessment. These include:
clear requirements for protection of MNES are set upfront;
capacity to address cumulative impacts at the landscape level;
coordinated establishment and management of offsets;
greater certainty to local communities and developers over future development;
reduced administrative burden for strategic assessment partners and government through:
- a substantial reduction in the number of environmental assessments required for an area; and
- the avoidance of potentially duplicative and separate environmental assessments by different types of government (such as Australian, state, territory or local governments); and
flexible timeframes to better meet planning processes.
5.36According to DCCEEW:
Entering into a strategic assessment offers the potential to deal with cumulative impacts on MNES and look for both conservation and planning outcomes at a much larger scale than can be achieved through project-by-project assessments. The process is designed to be flexible and provide the opportunity to reach a negotiated outcome for the benefit of both parties.
NT Government strategic assessment
5.37In parallel to the Commonwealth-level assessment, the NT Government has commenced a separate strategic assessment process. This is because any proposed development that has the potential to have a significant impact on the environment must be referred to the NT EPA for Territory-level assessment and approval. The NT EPA’s assessment is focusing on the impacts of the proposed precinct in accordance with the Environment Protection Act 2019 (NT) (NT EP Act).
5.38This Territory-level assessment is called an ‘Environmental Impact Statement’ (EIS). This NT EIS process will assess impacts to environment and air quality, culture and heritage matters, species listed at the Territory level, and human health. The NT EIS must consider how the proposed precinct may impact the land, sea, air, freshwater systems, and people.
5.39The EIS assessment considers the direct footprint of the precinct as well as all areas likely to be affected by project activities.
Terms of references will be addressed via single Program and EIS
5.40The NT EIS assessment has different Terms of Reference to the Commonwealth-level EIS explained above which focuses on the impacts to MNES. The final NT EIS Terms of Reference were issued by the NT EPA in September 2022 following a period of public consultation. The NT Terms of Reference detail the information that is required to be provided in the EIS to meet the requirements of the NT EP Act.
5.41Whilst the two assessment and approval processes are separate, and have separate Terms of Reference, NT DIPL will deliver a single draft Program and a draft EIS that meets the requirements of both regulators, and to ensure that the public exhibition periods are concurrent.
Purpose and timing of the NT EIS
5.42In preparing the draft EIS to address NT legislative requirements, NT DIPL must demonstrate that all potentially significant impacts across the wide range of environmental factors can be avoided, mitigated, or managed.
5.43According to NT DIPL, the NT EIS assessment will:
consider the competitive advantage of a precinct or region;
consider scenarios of development and the implications for issues such as land clearing, water and energy use, emissions and discharges and infrastructure needs;
determine the potential cumulative positive and negative biophysical, economic, social, cultural and health impacts;
provide advice on the most appropriate types of projects that might be approved and conditions that should apply to project-level approvals;
recommend governance structures, such as management of the precinct, conditions that should apply to individual projects and ongoing monitoring and management of all potential impacts; and
outline desired sustainability outcomes and how they are best achieved.
5.44The draft NT (and combined MNES) EIS is expected to be provided by NT DIPL towards the end of 2024. The NT EPA advised that:
The proponent [NT DIPL] at the moment is gathering all that information… We anticipate getting an [draft] EIS towards the end of this year. We haven't seen anything yet. It is premature to draw any conclusions with any precision or certainty about what the potential environmental impacts of that proposal might be because we haven't seen anything yet and nor has the community.
Draft EIS must assume worst-case scenario
5.45Under the agreement between the Australian and NT Governments and as per the Terms of Reference for the MNES EIS, the draft EIS must use the worst-case scenario, and apply the precautionary principle to the assessment of impacts.
5.46The NT Government explained that the scope of development included in the Strategic Assessment is ‘conceptual’ and not intended to prescribe specific layouts, but to document the activities used for the impact assessment. According to the NT Government, several precinct industry scenarios were considered in the initial industry modelling approach. These were the ‘Balanced Scenario’, the ‘Future Fuels’ scenario, and the ‘Downstream Processing’ scenario. The ‘Balanced Scenario’ was selected as the preferred scenario to use as a basis for the concept design and Strategic Environmental Assessment, due the increased flexibility and opportunity for industry to develop.
5.47As a result, the NT Government’s ‘worst-case-scenario’ (called the ‘Balanced Scenario’) modelling used one of each of the following industry types:
liquified natural gas plant
gas to liquids plant
blue hydrogen plant
green hydrogen plant
ammonia plant
green ammonia plant
urea and derivatives
methanol plant
ethylene (ethane cracker) plant
minerals processing plants.
5.48According to the NT Government, the intent is that, by considering the Balanced Scenario in the Strategic Assessment, the approvals (if granted) ‘can provide future flexibility toward enabling different industry types and combinations as the market demands and feedstock availability dictates’. The Strategic Assessment thus:
…considers cumulative impacts associated with a ‘full development scenario’ where the Precinct land area is entirely developed and each of the industry types (in the Balanced Scenario) is operating. The impacts associated with this scenario are considered to represent an upper limit for the Precinct.This means that a development scenario that involves a subset of the nominated industries (with differing production capacity and/or number of facilities), can be accommodated on the condition that the cumulative impacts associated with the full development do not exceed the limits set through the Strategic Environmental Assessment process.
NT EPA review and report
5.49Once it has received the draft EIS, the NT EPA will review the material for 60days and conduct a public consultation process. The NT DIPL will then be required to release advice addressing the public’s concerns regarding its draft EIS. This advice will be available for public comment for 15 days. Public feedback will inform NT DIPL’s development of the final EIS.
5.50Following its assessment, the NT EPA provides a report and, if appropriate, a draft environmental approval, including any conditions that should apply, or a statement of unacceptable impact, to the NT Minister for Environment about the environmental acceptability of proposed actions. The NT Minister then makes a whole-of-Government approval decision based on the NT EPA’s report. The NT Department of Environment, Parks and Water Security will monitor compliance with any approval conditions.
NT Government individual assessments of proponents
5.51The NT DIPL explained that that the strategic assessment (which incorporates both EPBC and NT legislative requirements) will provide overall limits for the cumulative impacts of the development, and that proponents will undergo a secondary process for specific projects:
Middle Arm is adopting a strategic environmental approval process…The reason why we have adopted that process, rather than a straight [project-by-project] EIS process, is to try and take into account the cumulative effects of the full development of the precinct. That will mean that we will have envelopes of those cumulative effects that then any proponent, including the NT government doing public works under that approval, will have a second-tier approval process for those specific projects and proponents, specific to their project.
5.52Regarding individual projects, the NT EPA told the committee that if the overall project is approved, individual precinct projects ‘have to…put in an approval notice, which is also subject to assessment’, and there will also be requirements for individual licensing of proponents.
5.53This approval notice process for individual projects can only occur after a broader, development area Environmental Approval has been granted by the NT Environment Minister. The approval notice process is required for all individual project development activities because the broader Environmental Approval ‘does not authorise substantial development or construction’. When considering an approval notice application, the NT Environment Minister is required to consult with the NT EPA. The NT EPA determines whether the individual industry proposal is within the scope of the broader strategic assessment and whether it complies with the conditions of the Environmental Approval. The NT EPA can then recommend that the approval notice be subject to conditions or refuse an individual development proposal where it was not assessed within the scope of the strategic assessment.
Concerns regarding government assessments
5.54Some submitters raised concerns about the strategic environmental assessments (SEAs) being carried out by the Australian and NT Governments. These concerns, set out below, focused on:
uncertainty of proposed projects;
assessments prioritise industry interests;
suitability of regulatory frameworks;
limitations on federal oversight;
lack of opportunity for consultation on individual projects under the NT assessment process; and
concerns regarding consultation.
Uncertainty of proposed projects
5.55Some environmental groups raised concerns about the adequacy of the environmental assessments in light of the uncertainty of the proposed projects. For example, the Environmental Defenders Office (EDO) argued that, as the activities for the proposed development are unclear, it is not possible for the Program to assess environmental or cumulative impacts:
The Program cannot reasonably assess impacts of potential activities at Middle Arm…It is not currently clear what the proposed activity undertaken by each announced proponent in the short-term or to the end of the 50-year period will involve, and the risk, risk quantum, and even source of all environmental impacts at the Middle Arm site is currently unknown. The expected duration, extent and likely severity of impacts on protected matters is therefore unclear. The Referral Report by the NT EPA provides only a list of ‘[p]reliminary potential impacts and/or benefits’ at this stage. Moreover, the assessment of cumulative impacts requires even greater certainty about the activities proposed at the site, and how their impacts may be avoided and mitigated. The program of Middle Arm is not certain enough to allow for assessment of environmental impacts on MNES.
5.56Indeed, Lock the Gate Alliance noted that ‘serious deficiencies’ have been identified by studies on the outcomes of SEAs. For example, one study assessed 12 EPBC SEAs against 12 criteria based on international literature and found ‘that the assessment of cumulative impacts and the consideration of alternative designs and options were often absent or insufficiently addressed’.
Assessments prioritise industry interests
5.57On a similar note, the Australian Marine Sciences Association (AMSA) expressed concern that the SEA process prioritises proponents’ interests over other values:
…the current proposed proponent-driven, SEA approach…places great emphasis on economic development and incentives for investors (fast environmental approvals, low regulatory burden, no requirement for EIS)—but does not sufficiently prioritize the protection of Darwin Harbour’s wide range of environmental, social, cultural values, uses and users.
Suitability of regulatory frameworks
5.58The committee also heard concerns regarding the NT Government’s regulatory framework.
5.59Some argued there is a lack of separation between proponents, industry, and regulators for the project. For example, that the NT EPA relies on environmental impact statements provided to it by industry, or by an NT Government department in the case of the Middle Arm assessment, which also relies on impact assessments provided to it by industry, and that the NT EPA conducts air quality monitoring only when advised by industry.
5.60Indeed, AMSA argued:
…there appears to be no clear separation between the Proponent (DIPL), industry and the government regulators (NT EPA, DAWE [the former Commonwealth Department of Agriculture, Water and the Environment, now DCCEEW]) in developing/undertaking the assessment process… AMSA recommends that both the SEA and EIS process for the MASDP [the proposed Middle Arm Industrial Precinct] should ensure clear separation between the Proponent, industry and the regulators…
5.61Likewise, Lock the Gate Alliance submitted that there is widespread community concern that the NT has a ‘weak’ environmental regulation framework.
5.62The NT EPA was questioned about the process for each of the precinct’s site occupants to develop their own environmental management plan (EMP) for activities proposed for the Beetaloo basin, as it has relevance for activities proposed at Middle Arm. Most notably, there were concerns around the NT EPA relying solely on the information provided by the site occupants to assess their EMPs.When asked whether the NT EPA has looked at any documentation beyond what had been provided by Tamboran Resources (Tamboran) in its EMP, DrPaul Vogel, Chairperson of the NT EPA, noted:
It has gone through an assessment by the department. There is another assessment by the onshore gas committee of the EPA. The EPA has formed a view about whether there is anything of significance there that can't be managed by other regulatory decision-makers that would require a full-blown impact assessment under the EP Act. It formed a view that wasn't necessary.
5.63Dr Vogel confirmed that the EPA’s assessment was based on the documentation that Tamboran submitted.
5.64Regarding Commonwealth regulatory arrangements, the committee heard concerns that DCCEEW relies on project proponents to determine whether there might be a significant impact on MNES and for the project proponent or the NT EPA to then refer that matter to DCCEEW for assessment.
5.65On a related note, the Public Health Association of Australia and NT Paediatricians argued that the Australian Government environmental impact assessment processes are ‘weak’, that the EPBC Act ‘is focussed solely on individual issues rather than the bigger picture’, ‘underpowered compared to similar legislation elsewhere’, and that ‘developments often are not required to comply with its aims’.
Suitability of using ‘development area’ approvals
5.66According to DCCEEW, strategic assessments are useful from a development perspective as they have:
…the potential for the Australian Government to approve ‘actions’ or ‘classes of actions’ that are associated with an endorsed Program. Approval of these actions can provide certainty and reduce the future regulatory burden within the strategic assessment area, because proposals that follow the endorsed plan and fit within the approved classes of action are no longer required to undergo a full federal environmental assessment.
5.67However, in its submission, DCCEEW acknowledged that ‘it is this second step [approval of classes of actions] that potentially allows development to proceed across a large area without further need for EPBC Act approval of individual developments (project-by-project assessments)’.
5.68For some submitters, the lack of engagement between Commonwealth regulatory bodies and the site occupants at Middle Arm raised concerns over a lack of external scrutiny of the NT’s environmental assessment and approval of activities undertaken at the precinct.
5.69Indeed, the EDO argued that a class of action approval under a strategic assessment process is inappropriate for the precinct as it limits federal oversight of individual projects:
The approval of an action or class of actions would occur at a later stage than the endorsement of the Program. Because of this it may be that the program is endorsed with limited certainty of the types of activities to be undertaken at precinct, and subsequent approvals of the projects at Middle Arm once they are identified will be fast-tracked as an approval under…the EPBC Act.
Given the intention of strategic assessment is to streamline assessment processes and minimize the need for certain assessments…future activities may be assessed on a shorter timeframe, with less rigour or potentially without a referral for assessment at all, than if each were assessed in a complete manner, with all relevant information on the proposed project available, individually. The [proposed Commonwealth] EPA may be limited in its future capacity to assess environmental impact of activities because of an earlier approval under the strategic assessment process.
5.70The EDO warned that ‘undertaking a strategic assessment instead of individual project assessments will result in poorer outcomes’.
5.71The EDO raised additional concerns regarding environmental assessments. These related to:
the inappropriateness of using a strategic assessment process for new fossil fuel projects, actions or infrastructure; and
(as discussed in Chapter 4) the adequacy of environmental assessments in the absence of existing baseline research on the ecological values of the area.
Lack of opportunity for consultation on individual projects
5.72In the NT, for projects that are assessed as part of a ‘landscape scale’ strategic assessment process, such as the proposed Middle Arm Industrial Precinct, they can apply to operate within a ‘development area’ rather than apply for project‑level approvals. If the broader development area Environmental Approval is granted, there is then no mandatory public consultation process for individual projects proposing to operate under that approval.
5.73The NT EPA submission acknowledged that some stakeholders ‘consider that [this arrangement] would preclude scrutiny of future industrial development at Middle Arm’. The NT EPA advised that it ‘is considering this matter and will provide advice on it to the Minister, taking into account the proposed governance framework put forward by the proponent and the procedures for the preparation and assessment of approval notice applications’.
5.74In response to a question on notice, the NT EPA did not comment on whether there should be mandatory public consultations on individual projects at the proposed Middle Arm Industrial Precinct, however, it pointed out that, ‘[t]he strategic assessment process…[already] has a minimum of three public consultation periods’.
5.75The NT EPA further pointed out that, as part of the broader environmental approval process, the NT EPA ‘can recommend a condition that requires public consultation…for subsequent individual industry proposals’. According to the NT EPA, ‘any conditioned public consultation process would most likely be a requirement of the precinct manager and proponent prior to the [individual level approval] application…being lodged with the Minister’.
Next chapter
5.76The following chapter explores issues relating to the rights and values of First Nations people, as well as key concerns raised by First Nations in relation to the proposed Middle Arm Industrial Precinct.