26 February 2011

Ecologically sustainable development is an important principle that does, and should, guide urban development. This principle ensures that development meets the needs of Australians today, while conserving our ecosystems for the benefit of future generations.

The role of the EPBC Act

While often criticised, there is no doubt that the state legislation is robust and able to ensure environmental protection in the decision making process. Decisions under state legislation are sometimes attacked by all sides in a debate, including environmental lobby groups and anti-development community activists. The criticisms advanced by the latter groups are often motivated by unhappiness with the substance of the final decision, rather than the quality of the environmental assessment that has informed that decision. There are many instances where proposals become subject to assessment and approval pursuant to state and Commonwealth legislation. For example, 25 per cent of referrals made under the EPBC Act relate to urban development (16 per cent residential development and 9 per cent urban development).

All of these urban development projects are subject to both state and federal approval requirements. At a state level, the approval process is led by a planning authority, but typically involves approval/consultation with environmental agencies, fire services, roads authorities, water utilities, energy utilities and others. This duplication in assessment and approval is an inefficient use of resources and adds unnecessary time delay to the approval process.

In a 2006 report commissioned by the government-backed Australian State of the Environment Committee, a number of projects were nominated by then Department of the Environment and Heritage to illustrate the effectiveness of the EPBC Act. None of the case studies reviewed by the paper related to urban development projects, despite the fact that one quarter of EPBC Act referrals relate to urban development. We believe that the substantive benefits are this additional layer of federal regulation in relation to urban development is minimal, and possibly non-existent.

Fragmented decision-making

For example, a state government may have both carefully planned the growth of housing in a region and also balanced the economic and social benefits of increasing the supply of housing against the environmental costs of increasing the urban footprint. It has adopted the strategy, but the Commonwealth may not recognise the finality of the strategy and instead focuses on a narrow range of environmental matters without considering the broader social and economic issues connected with the need to supply housing to the region.

Section 3(2)(b) and (c) says the Act "strengthens intergovernmental cooperation, and minimises duplication, through bilateral agreements ... and ... provides for the intergovernmental accreditation of environmental assessment and approval processes ..." Yet, no broad-based bilateral agreements have been reached to allow states to undertake an approval role. This has increased intergovernmental confusion and increased duplication.

Section 3(2)(d) says that the Act "adopts an efficient and timely Commonwealth environmental assessment and approval process that will ensure activities that are likely to have significant impacts on the environment are properly assessed ... " The efficiency and timeliness of the Act are undermined by institutional arrangements that divide the authority for approvals for routine urban development between two levels of government.

In doing so there is a risk that one level of government (namely the Commonwealth) will not fully consider the full range of social and economic issues. Investment confidence in new urban development opportunities is already being undermined by policy conflicts between the state and federal government.

For example, there is a lack of federal recognition for:

The fact that the Commonwealth has an approval role but does not endorse holistic strategies weakens investor confidence in state land release policies.

Institutional arrangements within the federal government

The difficulty that arises with omnibus legislation of this kind is that a decision-making approach that is appropriate for protected area, such as a world heritage site, is inappropriate when dealing with a request to carry out an activity on private land. For example, in a world heritage area, the emphasis is rightly on protection alone. By designating areas as world heritage, the community as a whole has already taken the decision that in that particular area, the communitys best interests are served by elevating protection above all other considerations.

There is no need for a nuanced balancing of competing social, economic and environmental issues in such an area. However, in relation to private land, there is a need to consider not only the legitimate interests of the private land holder but also the need to satisfy social and economic goals articulated through state and regional strategies and the need to promote investment certainty and confidence. At a state level this problem has been managed by segregating protected area management legislation, policy and administration from the state town planning authorities.

Removing the duplication of approvals

We note that the Commonwealth and state governments have, at least in principle, reduced some of the duplication. Bilateral agreements have been reached where state driven environmental assessment processes are recognised as meeting Commonwealth environmental requirements and are sufficient to deal with matters of national environmental significance. Therefore the opportunity exists for the completion of one environmental assessment that meets both the State and Commonwealth legislative requirements. This is occurs by way of bilateral agreement between the Commonwealth and states. However, unless an approvals bilateral has been reached, there is still a need for two approvals, one from the state-based planning authority and the other from the Commonwealth Minister for the Environment, Heritage and the Arts.

For most urban development projects, this is an unfortunate, costly, time-wasting and pointless requirement. If the Commonwealth has agreed to accept that state environmental assessment processes are sufficiently comprehensive and able to ensure robust environmental assessment, then surely the Commonwealth must acknowledge that the same system is capable of following through to provide a transparent and justifiable approval.

The EPBC Act allows for such a system. Section 46 of the Act provides for an approval bilateral, under which the Commonwealth may effectively delegate the approval role to a state. In other words, similar to the assessments agreements, the Commonwealth Minister for the Environment, Heritage and the Arts agrees to recognise state approval process as meeting the requirements of the EPBC Act under certain conditions. Unfortunately while there are a number of assessments bilateral in place, there is just one approvals bilateral applying specifically to the Sydney Opera House.

The benefits of a more integrated approach are clearly demonstrated through the consideration of two case studies.

Bondi Beach Case Study

The beach and foreshore is currently managed by the local council. If the council thought that there was a need for improvements to the Bondi pavilion or car parks, such development could trigger the need for an approval under the EPBC Act. This is unnecessary as these activities are extensively considered under state and local planning requirements. The beach is loved by Sydneysiders generally and Eastern Suburbs residents in particular. The local council and the NSW Government are far more directly accountable (than the Federal Government) to those who are most passionate about the beachs protection. It is impossible to imagine what development might have been approved under local and state processes within the national heritage area which will now be forbidden. On the other hand it is possible to see the increase in red tape that the national heritage listing (in the absence of an approvals bilateral) will have on the simplest of development activity within the Bondi Beach heritage area.

Of even greater concern is the potential impact that this listing could have on development of private property in the vicinity of Bondi Beach. Though private property is not listed, the EPBC Act requires that development in the vicinity of a listed site, that may have a significant impact on the values of the site, may be defined as a controlled action. This makes that activity subject to the approval process under Commonwealth legislation. In this situation there is a need for two approvals one from either the state government or the local council, and the second from the Commonwealth Minister.

The Commonwealth Department of Environment, Water, Heritage and the Arts could find that it is drawn into state planning approval processes for development in the vicinity of Bondi Beach. Not only is this an unnecessary duplication of process, it is also a misalignment of objectives. That is, the local/state planning authorities are in the best position to deal with the holistic assessment of development proposals. Unlike the Commonwealth Department of Environment, Water, Heritage and the Arts, state planning authorities must integrate their decision-making processes. That is, they cannot focus on a single issue. State planning authorities must fully integrate environmental, social and economic impacts when considering a proposal.

Clearly this situation is less than ideal. Surely the Commonwealth does not wish to engage in the day-to-day management of Bondi Beach or become embroiled in local land use and development approval processes. The existing legislation provides the opportunity to avoid this situation and, as demonstrated in the following example, can enable efficient and transparent assessment and approval of development within or in the vicinity of listed areas.

Sydney Opera House Case Study

Once a plan of management has been approved and the Commonwealth and state ministers sign an approvals bilateral agreement, no duplicate approval is required from the Commonwealth under the EPBC Act. The advantage of following this process is that it engages the Commonwealth in the development of appropriate environmental protection system which is then to be used by the appropriate state minister when making a development determination. The preparation of such a plan binds the State so that approvals of development inconsistent with the plan cannot be granted.

It must be noted that entering into an approvals bilateral agreement does not exclude the Commonwealth. States must notify the Commonwealth of all proposed actions that will have or are likely to have significant impacts on the site. Currently the Opera House approvals bilateral agreement is the only such agreement in existence, however the opportunity does exist for the development of a more generic approvals bilateral for urban development across the board.

Reducing duplication between listing regimes

It is obvious that there is an increasing overlap between the State heritage sites/protected areas listed under the state legislation and the national and world heritage sites listed under the EPBC Act.

For example, in NSW national and world heritage sites are also protected under state law through either:

• a listing the site on the NSW State Heritage Register (SHR); or
• the site being protected as a park or reserve under the National Parks and Wildlife Act 1974.

We ask that duplicated listing regimes be abolished. This means that all lower order heritage, state reservation or threatened species listings should automatically lapse when an equivalent Commonwealth listing is made. For example, once land is listed as a world heritage area, any lower order reservation in existence (such as a prior national park reservation) should lapse in favour of the new higher order listing. A subsequent lower level re-listing would be prohibited so long as the higher level listing is in place. This would also mean a state or local council heritage listing would automatically lapse if a site is listed as a national heritage site under the EPBC Act.

For example, in relation to Cumberland Plain Woodland, the existence of the national listing would remove the need for a separate state listing and the state listing would lapse. Once the current system of multiple, overlapping listings is abolished, the confusing and conflicting mandate for multiple teams of federal and state officials to be involved on the same issue is removed. This does not mean, for example, that state officials may not become involved in protecting a nationally listed threatened species. However, if they do so, it should only be as the delegates of the Australian Government with the full authority to issues approvals in their own right (without seeking the approvals of the Federal Government). If the Australian Government does not want to delegate approving authority state officials should have no involvement in relation to the issues concerned.

Our preference would be that, along with the abolition of dual state/federal listings, the Commonwealth should delegate full approval authority for urban development to state officials (along with any policy guidance the federal government wants to give) so that land use decisions can be made on an integrated basis (that is, all biodiversity issues, community amenity issues, social and economic issues can be considered together).

Offsets

The use of offsets helps to overcome the repeated conflict between property development and conservation so there are both:
¢ improved outcomes for biodiversity overall; and
¢ the social and economic needs of the community are still addressed.

In NSW the biodiversity banking proposal put forward by the Department of Environment and Climate Changes (DECC) is innovative and seeks to provide certainty for industry upfront. One of the hurdles remaining to the successful implementation of the NSW biodiversity banking scheme is the relationship between approvals under the states Environmental Planning and Assessment Act and the EPBC Act. The independent operation of these two acts means that when there are threatened species or endangered communities listed under both acts, dual approval is required. In particular, there is no consideration of offsets under the biodiversity banking scheme at to the point of deciding whether a particular activity is at a controlled action or possibly even at the later approval stage.

We understand that the DECC has commenced negotiations with the Commonwealth Department on this matter but little progress has been made.

Similarly, in the growth centres of Western Sydney, new housing developments will not be subject to state environmental laws that protect endangered plants and animals. This is because the NSW government has assessed the environmental value of the areas (in which up to 181,000 homes will be built) at the regional planning stage rather than assessing threatened species in relation to individual housing developments. The regional assessment led to biodiversity certification being granted to the growth centres environmental planning policy. The decision will speed up planning decisions and make homes more affordable.

As part of the biodiversity certification process, the government committed to a comprehensive program of offsets - with $530 million to protect 3,800 hectares of native bush in Sydney's west. Even though this money will target the largest, most intact remains of Cumberland Plain Woodland for permanent protection, the whole arrangement is not recognised under the EPBC Act for the purposes of deciding whether or not a development is a controlled action.

The EPBC Act should automatically recognise state offset and biobanking schemes both when decisions are made as to whether an activity is a controlled action and at the approval stage. Without such recognition, innovative policies, such as biobanking, are unlikely to succeed.

Merit appeal rights for applicants

It is becoming increasing difficult to secure investment for greenfield development in some areas, in part, because of the wide, unreviewable, discretion exercised by the Federal Minister for the Environment when the EPBC Act applies. This wide discretion risks weakening the link between land ownership and the ability to create value by developing land.