Reforms to Australia’s environmental regulatory landscape pass parliament

In return for this support, the Albanese government made several key concessions to ensure that the legislation passed.

The original draft of the EPBC Act introduced three approval tests for new projects. Firstly, compliance with the new standards will become mandatory, setting clear, enforceable benchmarks for ‘Matters of National Environmental Significance’ (MNES) and offsets. Secondly, the ‘unacceptable impact’ criteria will apply and prohibit approval of projects that exceed defined thresholds of harm to MNES, ensuring that certain impacts cannot be offset and must be avoided or mitigated. Finally, the new ‘net gain test’ requires that all residual significant impacts deliver a measurable improvement in biodiversity outcomes, achieved through offsets or new restoration contributions.

Two of the three tests have been refined following the agreement with the Greens.

Unacceptable impact criteria

It was originally indicated that the ‘unacceptable impact’ criteria would apply and prohibit approval of projects that exceed defined threshold of harm to MNES, ensuring that certain impacts cannot be offset and must be avoided or mitigated.

Following negotiations with the Greens, changes to the wording of the legislation were made. References to “will cause, or is likely to cause” were removed from various provisions. As a result, under section 527F, ‘unacceptable impacts’ is now defined as a “significant impact that causes, loss, damage or alteration” to a protected value or ‘undermines or seriously impairs” the protected matter or the viability of the threatened species.

The definition of ‘seriously impair’ in section 527H has been amended and is now “a significant impact of an action seriously impairs something if, compared to the action not being taken, the impact results in an impairment or alteration of the thing that is of a severe nature and extent”, replacing “seriously altered for the worse”.

These clarifications help make the definitions more easily applicable, but consideration will need to be given to the threshold for each protected matter as clarified by the national standards when they are introduced.

Compliance with ‘National Environmental Standards'

The reforms place new ‘National Environmental Standards’ at the heart of the updated EPBC framework. These standards will operate as legally binding instruments, setting clear outcomes, objectives and parameters for decision-making across all approval pathways.

The legislation originally required that actions should “not be inconsistent” with the standards, but the requirement has shifted. Under section 136A, the minister must not approve the taking of an action unless “satisfied that the taking of the action is consistent with any national environmental standard”. This may appear to be mere semantics, but the onus has shifted with this stricter legal test.

Lapsing of a ‘not a controlled action’ decision

Originally, ‘not a controlled action’ decisions lapsed on the fifth anniversary of the decision. The EPBC Act has now been amended, following consultation with industry, and a new section introduced, 79G, allowing for requests to extend the decision, which cannot be beyond the 10th anniversary of the decision.

Streamlined assessment pathway

The first draft of the reforms proposed the removal of three of the assessment pathways: the assessment on referral information, assessment on preliminary documentation and assessment by public environment report. Following consultation and debate, the preliminary assessment pathway has been retained. The assessment pathways under the new regime are:

• an accredited assessment process;  
• an assessment on preliminary documentation;
• a streamlined assessment;
• an environmental impact statement; and
• a public inquiry. 

Application of the EPBC Act to fossil fuels and forestry  

The approach to fossil fuel projects and forestry has been championed by the Greens as a major victory in the negotiations with the Albanese government.

Amendments were made to ensure fossil fuel actions, being an actions that involves the production or extraction of petroleum or coal, do not have access to the streamlined processes and national interest exemptions introduced by the reforms.

The new section 87(5A) provides that a fossil fuel action will not be eligible for a streamlined assessment pathway and, under section 146P and section 157A, the national interest exemption will not be available for fossil fuel actions. Additionally, it will not be possible for a bioregional plan to specify a priority class of actions that includes one or more fossil fuel actions.

Finally, fossil fuel projects involving unconventional gas or large coal mining cannot be approved under a bilateral agreement, following the removal of the proposed s48B as a concession to the Greens.

The EPBC Act has previously allowed for forestry operations subject to a regional forest agreement (RFA) to be exempt from seeking environmental approval. The Greens successfully negotiated to repeal this exemption and have land clearing be subject to National Environmental Standards. Forestry activities will be subject to the same assessment and approval requirements as other actions under the EPBC Act, including MNES triggers. The forestry industry will need to carefully engage in the development of the National Environmental Standards.

Under the old Act, if land had been lawfully cleared and used for agriculture or other purposes in the 15 years before the EPBC Act commenced, further clearing for the same purpose was generally exempt from EPBC referral and approval. This exemption has now been removed and clearing activities will become subject to the EPBC regime.

Bilateral agreements  

The reforms reaffirm bilateral agreements as a cornerstone of reducing duplication between federal and state planning and approval processes. The most recent version of the legislation allows the federal minister, or an authorised state or territory minister, to make an exclusion determination for a specific action. When an exclusion determination is made, the action is excluded from the operation of the bilateral agreement, and the action must then follow the standard federal referral, assessment, and approval process the EPBC Act.

When will the reforms take effect? 

All seven pieces of legislation have now passed both houses of parliament. Core provisions, such as the establishment of the National Environmental Protection Agency, CEO powers and the national environmental standards framework will come into effect immediately, while others will be introduced in a staged process.

After six months, new assessment pathways, including streamlined assessment and bioregional plans, and the accreditation of state or territory frameworks under updated bilateral agreement rules will be introduced.

After between six and 18 months, the full implementation of national environmental standards for all decisions, mandatory greenhouse gas disclosure requirements for major projects and the replacement of recovery plans with protection statements will come into effect.

RFA exemptions and other legacy exemptions, including the land clearing exemption, will cease within 18 months.
Co-written by Matthew Thornton-Dibb of Pinsent Masons.