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Australia – The Current Debate Over Australian Environmental Approvals.

30 May 2012

 

Legal News & Analysis – Asia Pacific – Australia – Environment 

 

A new National Productivity Compact entered into by Government and business leaders on 11 April 2012 is the first major step towards reforming and streamlining State and Commonwealth environmental approvals processes and reducing regulation costs for major development projects. The Compact provides for:

 

  • the development of bilateral agreements with the States to fast-track environmental assessments and approvals, under which States will be accredited to undertake certain Commonwealth assessments; and
  • the creation of taskforces for major projects by Commonwealth and State Governments for approvals to be administered by a single State agency instead of being assessed in duplication.
  • As the Compact is due to be finalised in late 2012, a number of changes to Commonwealth and State regulatory approval processes are possible over the next six to twelve months. If these changes arise they are likely to represent the most significant reform of the Commonwealth environmental approval process since the introduction of the Environment Protection and Biodiversity Conservation Act 1999 (Cth). Major project proponents, in particular, should monitor these changes.

 

On 11 April 2012, 26 corporate CEOs, State leaders and the Commonwealth Government agreed to a new National Productivity Compact ("the Compact") as a step towards reforming and streamlining State and Commonwealth environmental approvals processes and reducing regulatory costs for major projects.

 

The Compact was developed at the inaugural Business Advisory Forum in Canberra in the form of a six-point plan. It sets out high level principles for effective regulation and reform, including:

 

  • the development of bilateral agreements with the States to fast-track environmental assessments and approvals, under which States will be accredited to undertake certain Commonwealth assessments; and
  • the creation of taskforces for major projects by Commonwealth and State Governments in order for approvals to be administered by a single State agency, and thus remove duplication under Commonwealth and State processes.

 

Under the Compact, project assessments undertaken by States would not be repeated under the provisions of the Commonwealth Government’s Environment Protection and Biodiversity Conservation Act 1999 (Cth) ("EPBC Act").

 

The Compact is due to be finalised before the next Business Advisory Forum is held in late 2012.

 

Background

 

The move to streamline environmental approvals follows the Commonwealth Government's response to the independent review of the EPBC Act that was released on 24 August 2011 as part of a broad package of reforms for Australia's national environmental law.

 

The EPBC Act prohibits the carrying out of a "controlled action" unless approval is granted by the Commonwealth Environment Minister. "Controlled actions", that is, actions that are likely to have a significant impact on a "matter of national environmental significance" (such as threatened species and ecological communities, Ramsar wetlands or World Heritage Areas) are subject to a detailed assessment and approval process.

 

The need for regulatory reform

 

From a project planning perspective, duplicated approval processes and overregulation can add significant cost and delays to the timeframes allocated to assess a proposal. The Productivity Commission's Regulatory Impact Analysis: Benchmarking Issues Paper (March 2012) estimates the administrative compliance costs on business from regulation of all aspects of a project (of which obtaining environmental approvals are one part) as being $16.9 billion.

 

For environmental approvals, these administrative compliance costs often include a multitude of fees incurred by project proponents for: environmental consultants and engineers, environmental sampling and monitoring, carrying out environmental impact assessments, and collating and drafting reports and lengthy applications required in order to obtain both Commonwealth and State Government approval.

 

Where timelines and application requirements for obtaining duplicate approvals differ, project proponents often find themselves recommissioning, recollating and redrafting project reports for different applications.

 

The compact is affirmed by COAG

 

Under the Compact, small and medium sized business representatives also agreed to identify burdensome, inefficient or duplicative regulations that are impeding small business productivity and economic growth. Recommendations developed by business representatives are proposed to be biannually reviewed and actioned by the Council of Australian Governments meeting ("COAG").

 

Accordingly, following the Business Advisory Forum, the objectives of the Compact were reaffirmed by the Prime Minister, Premiers, Chief Ministers and the President of the Australian Local Government Association at the COAG on 13 April 2012. At the COAG, Ministers reaffirmed the commitment to maintaining high environmental standards while reducing duplication of assessment and approval processes. To achieve these objectives, attendees agreed to work together to:

 

  • develop environmental risk-and-outcome-based standards with States and Territories by December 2012;
  • fast-track the development of bilateral arrangements for accreditation of State assessment and approval processes, with frameworks to be agreed by December 2012 and agreements finalised by March 2013; and 
  • examine and facilitate the removal of unnecessary duplication and reduce business costs for significant projects.

 

Responses to the Compact

The move has prompted a number of responses from various groups. These are summarised below.

 

The Commonwealth Opposition

 

The Commonwealth Opposition has stated that a Coalition Government would go much further than the present proposal by entering into agreements with State and Territory Governments to delegate decision-making and create a single approval process (resulting in almost unilateral control of environmental approvals being given to the States). The process is proposed to be a "one-stop shop" with State officials administering the single assessment process, including assessing whether a project conforms to Commonwealth laws. Theoretically, this could mean one set of paperwork and a single approval application.

 

Additionally, the Commonwealth Opposition's proposes to include deadlines by which Governments would have to make decisions on projects, with penalties (for example, the partial return of lodgement fees) if the bureaucrats did not meet the deadlines.

 

The Australian Conservation Foundation

 

The Australian Conservation Foundation ("ACF") has stated that it does not support any move to delegate environmental assessment powers to the States and Territories, because environmental matters of national significance must only be determined at the national level.

 

Next steps

 

The COAG has established a cross-jurisdictional taskforce to develop the policy and timetable for the new "deregulation agenda", which will be chaired by the Secretary of the Commonwealth Department of Finance and Deregulation. The Taskforce is to prepare a comprehensive report to identify examples of burdensome regulation for businesses.

 

Overall, the COAG was in agreement that the Commonwealth will work with the States and Territories to improve the process for approvals either bilaterally (on a State-by-State basis) or collectively. The COAG also agreed to progress the key issues raised from the Business Advisory Forum, and provide advice to the next COAG meeting to be held in late 2012 about the specific reforms needed.

 

Actions

 

  • The Commonwealth Government, States and Territories have agreed to work together to streamline regulatory environmental approval processes for development projects.
  • As a result of the new commitment to streamline the process, significant legislative and procedural changes to Commonwealth and State regulatory approval processes may occur.
  • Major project proponents, in particular, should monitor these changes over the next six to twelve months.

 

 

For further information, please contact:

 

Jeff Lynn, Partner, Ashurst

jeff.lynn@ashurst.com

 

 Indra Soysa, Ashurst

indra.soysa@ashurst.com

 

 

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