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On 18 February 2021, the Senate referred the Environment Protection and Biodiversity Conservation Amendment (Regional Forest Agreements) Bill 2020 (the bill) to the Environment and Communications Legislation Committee
(the committee) for inquiry and report by 11 May 2021.
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On 11 May 2021, the Senate granted the committee an extension of time to report to 13 May 2021.
Conduct of the inquiry
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Following usual Senate practice, the committee advertised the inquiry on its website and wrote to organisations and individuals inviting submissions by 19 March 2021.
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The committee received 32 submissions, which are listed at Appendix 1 of this report and are available on the committee’s website.
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The committee also held a public hearing on 19 April 2021 in Canberra. A list of witnesses who gave evidence at the hearing appears at Appendix 2.
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Following the hearing, the committee received by email 1157 pieces of identical correspondence from the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), each signed by an individual.
Note on references
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In this report, references to the Committee Hansard are to the proof (that is, uncorrected) transcript. Page numbers may vary between the proof and the official transcript.
Scope and structure of this report
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This report comprises two chapters:
Chapter 1 (this chapter) provides an overview of the bill’s purpose and key provisions, provides background to the bill, and sets out the administrative details of the inquiry.
Chapter 2 examines key issues raised by submitters and witnesses and sets out the committee’s views and recommendations.
Purpose of the bill
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The bill would amend the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act) and the Regional Forest Agreements Act 2002 (RFA Act), to make clear that all forestry operations covered by a Regional Forest Agreement (RFA) are exempt from Part 3 of the EPBC Act.
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According to the Explanatory Memorandum, this measure would ‘affirm and clarify the Commonwealth’s intent’ regarding RFAs and their relationship to the EPBC Act. The Explanatory Memorandum indicates that this is considered necessary following the decision of the Federal Court in Friends of Leadbeater’s Possum Inc v VicForests (No. 4) [2020] FCA 704 (VicForests), which highlighted ambiguity as to how exemptions relating to RFAs are interpreted and created uncertainty for the forestry industry.
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The Explanatory Memorandum also draws attention to the Interim Report of the Independent Review of the EPBC Act conducted by Professor Graeme Samuel AC (Samuel Review), which recommended clarifying legal ambiguities in the relationship between the EPBC Act and the RFA Act.
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The proponent of the bill, Senator the Hon Bridget McKenzie, stated in her second reading speech that the bill would provide certainty to the forestry industry in the face of the ambiguities created by Justice Mortimer’s decision in VicForests:
The decision of Justice Mortimer has created ambiguity with respect to the provision of the EPBC Act that this Bill seeks to amend. This must be addressed expeditiously or else we will see continued uncertainty for forestry operations and the thousands of people employed by the industry. We could also see some people use this finding to disrupt legal, sustainable forestry operations not only in Victoria but other states and therefore require forestry operations to seek EPBC Act approval…
[The amendments] will give job security to the almost 200,000 people who are employed directly and indirectly by the industry and it will ensure forestry operations conducted under Regional Forest Agreements are given the certainty they need: that they are exempt from Part 3 of the EPBC Act and compliance matters will be dealt with through the state regulatory frameworks.
Provisions of the bill
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The bill seeks to amend subsection 38(1) of the EPBC Act and subsection 6(4) the RFA Act, to omit the words ‘that is undertaken in accordance with an RFA’ from each of those provisions.
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The amendments would apply in relation to an RFA forestry operation undertaken before, on or after the bill commences.
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The bill will commence on the day after it receives Royal Assent.
Background and context to the bill
Part 3 of the EPBC Act: matters of national environmental significance
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The EPBC Act is the Commonwealth’s central piece of environmental legislation. It provides a national legal framework for environmental and heritage protection and the conservation of biodiversity. It is administered by the Department of Agriculture, Water and the Environment (DAWE).
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Part 3 of the EPBC Act establishes a framework for regulating matters of national environmental significance (MNES). Under that Part, a person must not take action that has, will have or is likely to have an impact on a MNES, unless the action has been approved by the Minister for the Environment or is otherwise permitted under the EPBC Act. Criminal and civil penalties apply to contraventions of these requirements.
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Part 4 of the EPBC Act sets out cases in which environmental approvals are not required for actions impacting MNES. Relevantly, subsection 38(1) provides:
Part 3 does not apply to an RFA forestry operation that is undertaken in accordance with an RFA.
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An overview of RFA arrangements is included below.
Regional Forest Agreements
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RFAs are 20-year regional plans agreed between the Commonwealth and a State government for the conservation and sustainable management of native forests. RFAs were created pursuant to the National Forest Policy Statement (NFPS), a bilateral agreement signed by the Commonwealth and State and Territory governments between 1992 and 1995. According to the NFPS, RFAs enable the Commonwealth, States and Territories to ‘reach a single agreement relating to their obligations for forests in a region’.
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There are 10 RFAs currently in operation, covering five commercial native forestry regions in Victoria, three in New South Wales, one in Tasmania, and one in Western Australia. Altogether, RFAs encompass 39 million hectares of native forest, and account for about 18 per cent of Australia’s total forest.
A map showing the coverage of RFAs is included in Appendix 3.
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RFAs establish obligations for Commonwealth and State Governments, and seek to balance competing economic, social and environmental demands. Under an RFA, the State has responsibility for:
providing ongoing responsibility for day-to-day forest management;
providing certainty of resource access and specifying harvest volumes for industry;
establishing and maintaining reserves;
protecting threatened species;
ensuring ongoing monitoring and evaluation;
developing, revising and implementing forest management plans and codes of practice under relevant state government regulations.
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RFAs also establish and accredit the forest management and planning systems within each RFA region. Importantly, each RFA accredits relevant State Government-administered systems as meeting the objectives of the EPBC Act in terms of environmental protection and biodiversity conservation:
Where the Commonwealth has accredited a State system or process, the Commonwealth will give full faith and credit to the results of that system or process when exercising its own responsibilities.
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This is reflected in the RFA Act, which gives effect to the obligations of the Commonwealth under RFAs. RFAs are defined under the RFA Act as follows:
RFA or Regional Forest Agreement means an agreement that is in force between the Commonwealth and a State in respect of a region or regions, being an agreement that satisfies all the following conditions:
(a)
the agreement was entered into having regard to assessments of the following matters that are relevant to the region or regions:
(i)
environmental values, including old growth, wilderness, endangered species, national estate values and world heritage values;
(ii)
indigenous heritage values;
(iii)
economic values of forested areas and forest industries;
(iv)
social values (including community needs);
(v)
principles of ecologically sustainable management;
(b)
the agreement provides for a comprehensive, adequate and representative system;
(c)
the agreement provides for the ecologically sustainable management and use of forested areas in the region or regions;
(d)
the agreement is expressed to be for the purpose of providing long-term stability of forests and forest industries;
(e)
the agreement is expressed to be a Regional Forest Agreement.
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The RFA Act also provides that certain Commonwealth laws do not apply in relation to RFA wood or RFA forestry operations. Relevant to the inquiry, subsection 6(4) of the RFA Act provides:
Part 3 of the Environment Protection and Biodiversity Conservation Act 1999 does not apply to an RFA forestry operation that is undertaken in accordance with an RFA.
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All RFAs require an annual review for each of the first five years of the RFA. Following the initial annual reporting period for each RFA, it is a requirement that an ongoing five-yearly review is undertaken.
Federal Court decision: Friends of Leadbeater’s Possum Inc v VicForests
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As noted in the Explanatory Memorandum, a core purpose of the bill is to address the uncertainty created by the VicForests decision.
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VicForests concerned forestry operations in 66 specified forest ‘coupes’ (an industry term for areas of forest to be logged) in the Central Highlands region of Victoria, and the alleged impact of those operations on two native species of possum: the Leadbeater’s possum and the Greater glider. Both species are listed as threatened species under the EPBC Act.
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The applicant in VicForests was the environmental organisation Friends of Leadbeater’s Possum Inc (FoLP). The respondent was VicForests, a Victorian statutory agency responsible for the management of timber resources in Victorian state forests. FoLP contended that VicForests had not complied with the Victorian Code of Practice for Timber Production (Code) in the planning and conduct of its forestry operations. The Code forms part of the Victorian forest management system accredited by the Commonwealth under the Central Highlands RFA (CH RFA).
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FoLP argued that VicForests’ failure to adhere to the Code meant that forestry operations in the identified ‘coupes’ were not undertaken ‘in accordance with’ the CH RFA and accordingly the exemption in subsection 38(1) of the EPBC Act did not apply. FoLP contended that the forestry operations had, or were likely to have, a significant impact on the Greater Glider and/or the Leadbeater’s Possum, in contravention of section 18 of the EPBC Act. VicForests disputed all of the allegations made by FoLP.
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Justice Mortimer found for FoLP, concluding that as VicForests’ operations did not comply with the Code, they were not undertaken ‘in accordance with’ the CH RFA and consequently were not covered by the exemption in subsection 38(1) of the EPBC Act. As set out in the summary of the case:
Non-compliance with…the Code means that VicForests’ past forestry operations in 26 coupes were not conducted “in accordance with” the Central Highlands RFA and its future forestry operations in 41 coupes not yet fully logged are not likely to be conducted “in accordance with” the Central Highlands RFA…Thus the exemption in s 38(1) of the EPBC Act does not apply and the Court has found that VicForests’ forestry operations in all 66 coupes are exposed to the ordinary operation of the controlling provisions in the EPBC Act, relevantly s 18 and the prohibitions on actions having a significant impact on listed threatened species.
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Justice Mortimer also ruled that that VicForests had unlawfully logged
26 coupes in its past forestry operations, and restrained VicForests from carrying out its planned forestry operations in the coupes scheduled to be logged.
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VicForests lodged an appeal in the Full Federal Court on 10 September 2020. The Federal Court delivered its judgment on the appeal on 10 May 2021, finding in favour of VicForests. Relevant to the present inquiry, the Court ruled that forestry operations do not lose their exemption from Federal environmental law by breaking applicable state laws.
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In a statement to the media, FoLP stated that the organisation is ‘actively looking to appeal to the High Court’.
Implications of Justice Mortimer’s ruling
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As noted in the Explanatory Memorandum, Justice Mortimer’s decision in VicForests has highligthed ambiguity as to the meaning of the phrase ‘in accordance with an RFA’ in section 38(1) of the EPBC Act and subsection 6(4) of the RFA Act. In effect, the decision calls into question whether the those provisions require that an RFA forestry operation be undertaken in compliance with an RFA, or whether the operation need only be covered by an RFA in order to benefit from the exemption.
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Both environmental groups and spokespeople for the forestry industry have noted that the decision has significant implications for the RFA framework and its relationship to Federal environmental protection laws.
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For example, Environmental Justice Australia stated that the case would have national implications for RFA forestry operations, ‘which will now face much greater scrutiny.’ Ms Dayna Jacobs, a senior lawyer for the organisation who represented FoLP (the applicant) in VicForests, foreshadowed potential future challenges to forestry operations conducted under RFAs—noting that Justice Mortimer’s decision sets an important legal precedent by applying federal threatened species law to the native forest logging industry.
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Forestry industry stakeholders expressed concern as to the implications of the decision in VicForests for the forestry industry, calling for Government to urgently respond to the decision. For example, Mr Ross Hampton,
Chief Executive Officer (CEO) of the Australian Forest Products Association (AFPA), stated:
[T]he livelihoods of tens of thousands of workers in Tasmania, Victoria, NSW, and Western Australia is at stake if the questions about RFAs raised by the court decision [in VicForests] are not urgently resolved… AFPA calls on the State and Federal Governments to urgently work through the implications of today’s decision to provide certainty to timber workers and their communities.
The Samuel Review
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The EPBC Act requires an independent review of the ‘operation of [the Act] and the extent to which [its] objects…have been achieved’ to be undertaken within 10 years of the commencement of the Act, and thereafter at intervals of not more than 10 years. The most recent review (Samuel Review) commenced on 29 October 2019, led by Professor Graeme Samuel AC.
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An Interim Report for the Review was presented to Government in June 2020. The Interim Report noted that stakeholders had expressed concern that the requirements of the EPBC Act are not sufficiently addressed in RFAs, and that monitoring, compliance, enforcement and assurance activities are inadequate. In this respect, it stated that the Commonwealth should have the ability to intervene in project-level compliance and enforcement where ‘egregious breaches’ are not being effectively enforced by the accredited party (the relevant state). In addition, the report asserted that legal ambiguities in the relationship between the EPBC Act and RFAs should be clarified such that Commonwealth interests in protecting the environment interact with the RFA framework in a streamlined way.
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A Final Report for the Samuel Review was presented to Government in October 2020. In the forward to the Final Report, Professor Samuel asserts that the EPBC Act is outdated and presents a barrier to holistic environmental management. To address these deficiencies, the Final Report calls for extensive reform of the EPBC Act and a ‘fundamental shift’ in Australia’s environmental management—from a transaction-based approach focussed on individual projects to one centred on effective and adaptive planning.
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Relevant to the inquiry, the Final Report noted ‘fundamental shortcomings’ in the interactions between RFAs and the EPBC Act, stating that there is ‘low confidence’ that the environmental considerations under the RFA Act are equivalent to those imposed by the EPBC Act. Further, the Report stated that Commonwealth oversight of environmental protections under RFAs is insufficient, calling for immediate reform. According to the Report, National Environmental Standards for MNES should be immediately applied and RFAs should be subject to robust Commonwealth oversight.
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The Final Report also made reference to the decision in VicForests, stating that legal ambiguities in the relationship between the EPBC Act and the RFA Act should be clarified. According to the Report, this should be achieved by requiring that RFAs demonstrate consistency with National Environmental Standards to avoid the need for EPBC Act assessment and approval. According to the Report, this ‘accreditation model’ would support greater Commonwealth oversight of RFAs, including the effectiveness of state-based compliance and enforcement regimes.
Consideration by other committees
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As part of usual parliamentary practice, the committee takes into account any relevant comments by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (PJCHR) when examining a bill.
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The Scrutiny Committee examined the bill in Scrutiny Digest 1 of 2021. It had no comment in relation to the bill.
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The PJCHR examined the bill in Scrutiny Report 1 of 2021. It had no comment in relation to the bill, on the basis that the bill does not engage, or only marginally engages, human rights; promotes human rights; and/or permissibly limits human rights.
Acknowledgements
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The committee would like to thank all organisations and individuals that made submissions or gave evidence at the hearing.