The Second stage of the EPBC Act reform is announced

Introduction

On 16 April 2024, the Hon Tanya Plibersek MP, the Minister for the Environment and Water (the Minister) announced progress on the package of reforms to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).

This announcement relates to the second stage of the Australian Government's 'Nature Positive Plan: better for the environment, better for business' (Nature Positive Plan).

Following the Minister's announcement, we expect draft legislation to be introduced into Parliament in the coming weeks to create two new national independent bodies:

• Environment Protection Australia (EPA): a new federal environmental regulator, which will administer and enforce a range of Commonwealth environment laws, including the new Nature Positive legislation; and
• Environment Information Australia: which will maintain national environmental data, release State of the Environment Reports, and report on progress on achieving national environmental goals.

However, legislation to effect the substantive reforms including replacement of the EPBC Act has been deferred indefinitely.

• Background
• The Second Stage of the EPBC Act Reforms
• Next steps

Background

Section 522A of the EPBC Act requires an independent review of that Act at least every 10 years. On 28 January 2021, Professor Samuel's Independent Review of the EPBC Act (Samuel Review)¹ was released, and in response in December 2022 the Australian Government released the Nature Positive Plan.

The Nature Positive Plan introduced the Australian Government's staged approach to implement extensive national environmental reforms consisting of:

• Stage 1 (complete): the establishment of the Nature Repair Market and expanding the 'water trigger' in the EPBC Act by requiring approvals for unconventional gas developments which was completed in late 2023. See our previous update on the Nature Repair Market here.
• Stage 2 (just announced): creating an independent EPA and independent Environment Information Australia.
• Stage 3 (ongoing): new environmental laws which will cover national environmental standards and environmental approvals (the Nature Positive Laws).

The Nature Positive Laws will likely be the most significant change to Australia's environmental laws since the commencement of the EPBC Act.

All three stages were intended to be implemented in full by the end of 2023. This timeframe has now been significantly extended, with the legislation to establish the EPA and Environment Information Australia to be introduced into the Australian Parliament separately from the more substantive Nature Positive Laws.

To achieve its international goals, and ensure Australia does not get left behind, the need for the development of the urgent reforms identified in the Nature Positive Plan is evident.

This update explains the Nature Positive Plan, the details of the Minister's recent announcement on the proposed EPA and Environment Information Australia, and the timing on the next stages of the reform package.

What is the Nature Positive Plan?

The Nature Positive Plan was released by the Australian Government in December 2022, in response to the Samuel Review of the EPBC Act. It outlines its commitments to strengthen environmental laws and implement a framework for a nature positive Australia.

The Nature Positive Plan defines "nature positive" as circumstances where nature (species and ecosystems) is being repaired and is regenerating, rather than being in decline.

The Nature Positive Plan recognises the need for extensive environmental reform to:

• protect Australia's environment and prevent further extinction of native plants and animals;
• provide certainty to project proponents, de-risk investments and promote sustainable economic development through faster decision making and clear priorities; and
• restore public accountability and trust in environmental decision making by establishing an independent EPA, regular reporting on progress towards environmental goals and making environmental data publicly accessible.

The Second Stage of the EPBC Act Reforms

EPA

The Samuel Review concluded that there are low levels of trust in the current operation of the EPBC Act, and that the Australian Government's performance in making and enforcing decisions under that Act is inconsistent. Reforms were recommended to improve the strength, consistency and independence in the compliance and enforcement regime.

The Australian Government's response through the second stage of the reforms, as announced by the Minister, is to set up a new EPA and Environment Information Australia which will deliver "stronger environment powers, faster environment approvals, and more environment information and transparency".²

Initially the EPA will operate within the Department of Climate Change, Energy, the Environment and Water (DCCEEW) before becoming an independent statutory authority by July 2025 (or when the Stage 3 reforms are passed).³

What will the new EPA do?

As an independent statutory entity, the new EPA will have broad ranging powers and functions, which extend beyond those recommended in the Samuel Review to also include assessment and approval decision making.

The EPA will:

• undertake project assessments, issue approvals and decide on post-approval matters;
• administer Australia's national environmental laws that implement Australia's international commitments and obligations, including the EPBC Act, the Nature Positive Laws (once introduced), and laws that regulate sea dumping,⁴ hazardous waste,⁵ ozone protection and synthetic greenhouse gas management,⁶ product emissions,⁷ recycling and waste reduction⁸ and underwater cultural heritage⁹.
• have significant compliance and enforcement powers.

The CEO of the EPA will have delegated responsibility to assess applications under the new Nature Positive Laws and decide whether to approve, refuse or vary applications for approval under the EPBC Act (or presumably the Nature Positive Laws, when introduced), which are powers currently held by the Minister.¹⁰ We understand that the Minister will be able to "call in" certain decisions which would otherwise be made by the EPA. This may be a useful way to progress decisions facing road blocks in the EPA assessment process, although it is likely that the Minister's "call in" power will not apply to proposals assessed under State and Territory accredited processes.

The EPA's regulatory powers will involve:¹¹

• ensuring compliance with, and enforcement of, national environmental laws, which will include initiating criminal proceedings;
• the ability to issue Environment Protection Orders (requiring work to stop) if there is a contravention, or likely contravention, of the Nature Positive Laws; and
• expanded powers to audit businesses to ensure compliance with environmental approval conditions.

It is also intended that States, Territories and Commonwealth agencies can enter into an accreditation arrangement (approved by the CEO of the EPA) to assess, approve and enforce all or part of the proposed action under the relevant State and Territory laws, with the Commonwealth EPA retaining some rights of approval and managing ongoing compliance with the Nature Positive Laws. The CEO of the EPA will need to be satisfied that if the assessment process is accredited, the objectives and requirements of the Nature Positive Laws, including the National Environmental Standards will still be met.

It is not envisaged that the Commonwealth EPA will administer compliance with State Environment Protection Authorities, but will function independently of the existing agencies.

Increase in penalties

The Minister has announced that the maximum fines for civil and criminal penalties will be increased, with a court being empowered to impose fines of up to $780 million, or in criminal proceedings, imprisonment for up to 7 years. Currently maximum fines and penalties under the EPBC Act are $15,650,000 (for a body corporate) and $1,565,000 (for an individual) and / or 10 years imprisonment.

It is also anticipated that providing false or misleading information will constitute an offence with the application of a civil penalty.

Environment Information Australia

The Samuel Review identified that the current environmental data and information framework is disparate, disorganised and incomplete, and that there is no clear, authoritative source of environmental information to rely on and to inform decisions made under the EPBC Act.¹² It recommended an amalgamation of environmental information and data systems into a single 'federated' data platform for environmental information, which draws on multiple sources, including information from States and Territories.¹³

The Samuel Review recommended introducing a national custodian, that is responsible and accountable for the efficient operation and integrity of the environmental information supply chain independent to the decision-making function. The Nature Positive Plan proposes that the Environment Information Australia will act as this custodian, and as recently announced by the Minister, will be the source of trusted national environmental data which can support decision-making for environmental approvals.

What will Environment Information Australia do?

The Environment Information Australia has been established within DCCEEW. Environment Information Australia is intended to be independent, and maintain data and information for purposes of information sharing across States, Territories and the Commonwealth, and to inform decision making. The new legislation is expected to include a new statutory position, being the Head of Environment Information Australia, which will be given a range of functions related to managing environmental information and data.

Environment Information Australia will create a repository of information and data originating from proponents under the conditions of approvals, information voluntarily provided, and information from state and territory regulators.

How sensitive data and information is handled (and is determined to be sensitive) as opposed to data that may be made publicly available, will be important. We consider that while making data and information publicly available can assist in promoting transparency and accountability, striking the balance in safeguarding sensitive information will be critical to ensure the Environment Information Australia achieves its objectives of enhanced data and information gathering to inform future decisions.

Although the draft legislation to establish the Environment Information Australia is not yet available, DCCEEW's December 2023 Consultation proposed that Environment Information Australia will:

• oversee and coordinate improvements to Australia's environmental data and information and address key data gaps;
• develop and implement a monitoring, evaluation and reporting framework on national environmental objectives;
• regularly report on Australia's progress and outcomes towards achieving a nature positive position and Australia's national environmental goals;
• oversee the preparation of the State of the Environment Report every 2 years (as opposed to every 5 years currently, with the first report to be delivered by no later than September 2026);
• establish and maintain environmental economic accounts that provide information about the extraction of natural resources;
• designate and create a list / register of National Environmental Information Assets; and
• provide an annual report to the Minister.

Next steps

Draft legislation to bring into effect the second stage of reforms to establish the independent EPA and Environment Information Australia is expected to be introduced into the Australian Parliament in coming weeks. The draft legislation has not yet been made publicly available.

If passed by Parliament, the second stage package of reforms will change the federal environmental regulatory landscape. It will significantly change the manner in which approvals under the EPBC Act are applied for, the extent of information required to accompany applications, as well as how compliance with environmental laws is managed.

The Minister has also indicated that work will continue on preparing exposure drafts for the Nature Positive Laws to be made available for public consultation. The timing of any public consultation is unclear, and we may see the more significant reforms in Stage 3 regarding the Nature Positive Laws deferred until after the 2025 Federal election.

Deferral of the third stage of the reforms has the benefit of allowing more extensive consultation before being introduced into Parliament, given the consultation to date has largely been with selected stakeholders.

If you are interested in finding out more about the nature positive reforms and amendments to the EPBC Act, please contact a member of our Environment and Planning team.