Assessment pathways under Australia's proposed new Federal environmental laws

What you need to know

• The Australian Department of Climate Change, Energy, the Environment and Water (DCCEEW) has released a suite of consultation papers proposing substantial reforms to Australian environment legislation to replace the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).
• The proposed reforms include streamlined assessment pathways, by providing a "standard" assessment pathway and a new pathway for "low impact" actions.
• The result will be a considerable change to the federal environmental approvals framework, intending a streamlined formal approvals process by placing increased obligations on proponents to self-assess and consult prior to making applications.
• Proponents will likely be required to do more earlier, and with less certainty from the regulator. This is may lead to additional lead time in preparing applications and additional compliance costs.

What you need to do

• Businesses should consider the potential impacts of the proposed reforms on their business and if they should participate in consultation either directly or through a relevant industry body.
• Submissions can be made via DCCEEW's consultation hub until 30 March 2024.

Our alert series about the reforms

This is the second in a series of alerts about the proposed reforms.

We provide an overview of the reforms and details of the proposed new Environmental Protection Australia (EPA) and Environment Information Australia (EIA) in our 13 February 2024 alert "Overhaul of Australian environmental laws begins in earnest with release of detailed consultation papers"

This alert discusses the proposed changes to assessment pathways.

Our next alert will summarise the key proposed National Environmental Standards (NES).

Overview – what will change

The new EPBC Act will have some significant differences to the current law. While it is expected that the matters of national environmental significance that are the triggers for Commonwealth environmental assessment will be unchanged, the assessment process will be quite different, with the referral step removed and the proponent required to undertake self-assessment without the direction offered by the Minister specifying relevant controlling provisions of the Act. Typically, the decision maker under the new Act will be the new EPA, rather than the Minister.

Changes to assessment pathways

The consultation papers provide new details about the proposed assessment pathways under the proposed reforms, which aim to streamline the numerous assessment methods and decision types under the current EPBC Act into two pathways:

• the "Standard pathway", for proponents that believe their action will or may have a significant impact on a protected matter; and
• the "Low impact pathway", for proponents that are relatively certain that an action is not likely to have a significant impact on protected matters.

Standard pathway

A proponent must apply for an approval to take an action if:

• it considers the action is likely to, or may, have a significant impact on a protected matter; or
• the CEO of the EPA has decided the action requires approval (which is a possible outcome of the low impact pathway, discussed below).

The CEO of the EPA must decide within 60 business days of accepting an application for approval whether to approve the proposed action (with or without conditions) or refuse it.
The 60 day time period does not start on the date of lodgement of an application, but when it is accepted by the EPA. An application is not considered to have been accepted by the EPA until all required information prescribed by the rules has been submitted.

Under the proposed decision-making criteria, the EPA may only approve the taking of an action if it is satisfied that:

• approving of the action is not inconsistent with any National Environmental Standards (NES);
• the proponent is a fit and proper person to be granted an approval;
• the proponent has taken all reasonable steps to avoid and mitigate the proposed action's likely significant impacts on protected matters;
• the approval of the action would not be inconsistent with Australia's obligations under international agreements; and
• approving the taking of the action would not be inconsistent with the protection statement within a recovery strategy (discussed below), the abatement statement in a threat abatement strategy, or any relevant heritage management principles or agreements.

The EPA must also consider a number of factors, including the content of the application and responses to information requests, recovery strategies and abatement strategies, and any proposed restoration actions or restoration contributions.

Because the proponent is expected to have undertaken its environmental impact assessment prior to submitting the application, the EPA only has 60 days to make a decision. The EPA may request additional information, but the 60 day clock will only stop running when both the EPA and the proponent agree. This is a change from the current system where the decision clock is stopped upon an information request being made.

The CEO of EPA must not approve the taking of an action if they are satisfied the taking of the action would have, or is likely to have, an "unacceptable impact" on a protected matter. Unacceptable impact is proposed to be defined to include a range of impacts, for example in respect of threatened species, ecological communities and migratory species:

• Reduce the viability of a listed threatened species or ecological community or migratory species in the wild; or
• Adversely impact habitat for a listed threatened species or ecological community or migratory species in a critical protection area, as described in a protection statement or that meets the definition in the Act.

Insights

Such a proposed assessment pathway marks a considerable departure from current controlled action assessment pathways. Under the current EPBC Act, when a proponent first refers a proposal, the Minister decides whether the action is a "controlled action", and if so, which of the pathways it will be assessed under. The current process has different levels of assessment, including assessment on referral information, preliminary documentation or an environmental impact statement.

Under the proposed reforms, the proponent will conduct a self-assessment in accordance with the legislation and NES prior to making an application to the EPA, and the EPA will then decide the application based on the proponent's self-assessment material and according to its decision-making criteria. This single process will replace the multiple assessment methods in the current EPBC Act.
This new pathway raises questions about the level of information that will need to be included in a self-assessment and what matters must be considered. Under the current system, when the Minister decides that an action is a controlled action, the decision will list the relevant controlling provisions for that action (eg threatened species and communities). This provides guidance to a proponent about what matters it would be expected to consider and manage in an environmental assessment.

Under the proposed reforms, it appears that the proponent may determine what matters to consider prior to submitting an application. It is not yet known how this will operate in practice, and whether there will be any further guidance provided by the EPA. Some guidance will be given by the proposed NES for Data and Information, but of a more general nature.

A decision not to approve a proposal due to unacceptable impacts under the proposed reforms is expected to operate in a similar way to a decision that a proposal is clearly unacceptable under the current EPBC Act. The prescriptive definition of unacceptable impact will offer proponents greater transparency though may result in a greater number of decisions to refuse proposals on the basis they are unacceptable.

Low impact pathway

The new proposed "low impact pathway" is intended to provide legal certainty for a proponent that is "relatively certain" that an action is not likely to have as significant impact on protected matters.

It is not yet known what level of information will need to be provided with an application under either the standard or low impact pathway, or how this will differ between the two pathways. The consultation papers do indicate low impact pathway applications must include an estimate of scope 1 and scope 2 greenhouse gas emissions likely to be generated by the action, as well as proposed management of those emissions.

It is otherwise too soon to comment on any difference with the current requirements for referrals under the EPBC Act.

Once an application under the low impact pathway has been accepted, the CEO of the EPA will have only 20 days to decide that:

• approval is not required for the proposed action; or
• the action requires approval under the standard pathway.

The EPA must consider a range of factors in making a decision, such as whether any likely adverse impacts on protected matters and the proposed mitigation steps, and cannot make an "approval not required" decision unless that decision would not be inconsistent with any NES.

Insights

Under the current EPBC Act, a decision that an action is not a controlled action in relation to a particular matter of national environmental significance means that no offence can occur if the taking of that action does result in a significant impact.

While the consultation materials do not directly address this point regarding a bar to offence, we assume that an "approval not required" decision under the new framework will give proponents the same protection from prosecution as a "not a controlled action" decision under current laws.

The consultation materials also make no allowance for attaching conditions to an approval not required decision, suggesting that under the proposed laws there will be no equivalent of what is commonly referred to as a "not a controlled action-particular manner" decision. This may mean that, in circumstances where an action could previously have been determined to not be a controlled action if the decision maker attached "particular manner" conditions, that action may need to undergo full assessment through the standard pathway. This will need to be further considered as consultation and legislation progresses.

Next steps?

The Government had initially set a very ambitious timeline for these reforms, planning to introduce legislation to parliament before the end of 2023. With public comment now open until 30 March 2024, however, we expect it is unlikely draft legislation will be available until the second half of 2024 and it is unclear if it will be publicly released before being introduced to Parliament..

For now, businesses should consider the potential impacts of the proposed reforms on their business and if they should participate in consultation either directly or through a relevant industry body.
Submissions can be made via DCCEEW's consultation hub until 30 March 2024.

Want to know more?

• Government set to reform national environmental laws but there are some challenges for industry (12 December 2022) - Discusses the Federal Government's Nature Positive Plan.
• Overhaul of Australian environmental laws begins in earnest with release of detailed consultation papers (13 February 2024) - Provides an overview of the proposed reforms, and a discussion of the proposed new EPA and EIA.