McCORMACK, Associate Professor Phillipa, Future Making Fellow, Environment Institute, Adelaide University [by video link] SCHNEIDERS, Mr Lyndon, Executive Director, Australian Climate and Biodiversity Foundation SYDES, Mr Brendan, National Biodiversity Policy Adviser, Australian Conservation Foundation [10:21] CHAIR: Welcome. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to you. I'll invite each of you to make a short statement, and, at the conclusion of your remarks, I'll invite members of the committee to ask questions. Mr Schneiders : Thanks for the opportunity to present again today on this important issue. Firstly, I just want to acknowledge the traditional owners of the country on which we are meeting today. There are a few things to say. Firstly, I guess it's important to acknowledge and sort of celebrate the fact that, after more than two decades of rancour and debate, the parliament managed to pass some very substantial and long-overdue reforms to Australia's national environment laws. And that is no small thing, let me tell you. I think that's a very important thing to acknowledge upfront. Obviously, the passage of legislation in itself does not change the world. What changes the world is what practically happens in the community in decisions that are made on the ground, particularly when it comes to protection of matters of national environmental significance, which is the primary and priority role of this legislation and the sort of heads of power it's been given through the various treaties that Australia has entered into over the last 40-odd years. There's also obviously a very important economic growth agenda and dimension to these reforms as well, and so we always have to acknowledge the interrelationship between these two things. But it is important to once again remember that the point of the national environment laws is to protect these matters of national environmental significance in this beautiful continent of ours. Thinking forward, which is really what I wanted to address in my opening statement, the real job here is to enable the reforms to occur in a timely, transparent and well-resourced fashion. Thinking about the decisions that this government has to make and the considerations that this place needs to give coming up in the May budget, it is incredibly important that the resources are going to be available to enable the key reforms to happen. In no particular order, the establishment of Environment Information Australia, as outlined by previous submissions, is enormously important. High-quality data, the best data that we can possibly generate, is critical to consistent, reliable and trusted decision-making when it comes to the protection of matters of national environmental significance. Graeme Samuel, back in 2019 and 2020, in phases of the independent inquiry, spoke in chapter and verse about the need for, as much as possible, the development of a single source of truth for reliable information that decision-makers can draw on and so the public and the community can have faith that, when decisions are being made in respect to the management and the protection of the environment, we've got the very best data available. Australia has fantastic research institutions, fantastic scientists and a fantastic knowledge base developed over many, many decades and many trusted institutions that develop that data. Drawing on that and bringing that into the heart of government decision-making is absolutely essential. The EIA is up and running, which is fantastic news, but making sure it's got the data, the capabilities and the cooperation from the states and territories and also from industry to do its centrally important job is going to be a key test for success. Equally, the establishment of the National Environmental Protection Agency will be a game-changing reform if well resourced and set up in the best possible way. Bringing on an independent and strong cop on the beat, as Samuel talked about, that we can all—both industry and the community—have faith in as an independent decision-maker to manage the really challenging balance between protecting the environment and supporting economic activity is absolutely essential. So we cannot delay getting that organisation established. Doing the transition from the government department to the national EPA is incredibly important. Equally important is the resourcing and the promotion of regional plans. One of the key features of the reforms that were passed in the parliament in November-December last year was the establishment of new processes to promote regional planning. Regional planning is extremely important in being able to enable decision-makers, proponents and the community to not just look at development at the site level but look at it in the landscape in which these developments are occurring. There have been a number of trials put in place between the states, the territories and the Australian government over the last several years to get these regional plans in place. Real resourcing to bring the states, the territories, the local communities and the Australian government together to prioritise the development of these regional plans and understand the impacts of cumulative development and the key priorities for protection and restoration is absolutely essential. There's much more I could say, but I won't because there are other people here and you've got a busy day. But I guess my opening statement is that it's great the reforms have been passed. The real work now starts. The real work requires a significant investment in the capabilities of these reforms and the rollout of these reforms over the next 12 to 18 months. Mr Sydes : Thank you for the opportunity to appear again before this committee. We also welcomed the passage of the bills late last year, and we were particularly pleased to see some considerable strengthening of the bills secured through Senate negotiations. The reforms create a framework or scaffold for the long overdue and critically important step change that's required in nature protection in Australia. But it's about the detail now. It's the implementation that follows that's going to be really critical in determining whether or not that step change in nature protection is actually delivered. The instruments, such as the standards and a whole range of other regulations, will be critically important in determining whether or not the promised improvements in nature protection are actually delivered. So we welcome the committee's focus on those standards and the continuation of the committee beyond the passage of the bills. The responsibility for a lot of those instruments now rests squarely with Minister Watt and the Albanese government. There's a whole plethora of subordinate instruments under this legislative framework, not just the standards but other regulations, that will do critically important things, like define 'net gain'. The drafts of the standards that we've seen so far, the two of them—the one for matters of national environmental significance and the one for offsets needing improvement—won't in our view deliver the step change in nature protection that's required and that's been promised. They're not, in their current form, the foundation for accountability for the environmental outcomes. They're not drafted in a way that lends them to measurement or to, as I said, accountability for the outcomes that they're intended to deliver. And they risk, in their current form, particularly the MNES standard, I would say, becoming simply a framework for a rush to accreditation of state and territory governments under the EPBC Act and for locking in business as usual under those state and territory regimes, rather than lifting our national nature protection game here in Australia. As everyone has agreed, as was very clear through the Samuel review, the first 20 years—25 years now—of the EPBC Act have been a failure. That needs to change, and this next phase of implementation will be critical in ensuring that that actually occurs. Thank you. I look forward to your questions. CHAIR: Thank you very much. Professor McCormack. Prof. McCormack : I just have a couple things that I want to note. First of all, the Environment Institute represents a whole suite of disciplines. We come from across ecology, biology and those sorts of hard sciences through to psychology and anthropology, and my colleagues in the Adelaide Law School. We've been actively together, in an interdisciplinary way, following the reform process at the national level and in South Australia, where a new biodiversity act that's really ambitious was passed by parliament last year. Like my learned friends in the room, I think there are some things to celebrate about this reform of the EPBC Act, but there is lots of work still to do. The work that we've seen so far—I support Brendan's comment that we haven't seen yet examples of instruments that will turn things around. There are two things I want to highlight. The first is about discretion. We note in the Environment Institute's submission that there remained hundreds of instances of ministerial discretion in the act, where the minister simply needs to be 'satisfied', rather than ensuring, for example, that decisions are actually consistent with national standards or actually achieve protection of the environment. This committee, of course, is very well aware of the detail of Graeme Samuel's review of and report on the EPBC Act, and that report specifically pointed to excessive discretion as both a driver of litigation, which is one of the only mechanisms that are available to clarify vague requirements after instruments are put in place, and a driver of the failure to implement and achieve the act's purposes, including protecting the environment. The statutory reform process proceeded slowly and then all at once. But this committee process is a really important opportunity to ensure that these standards, as they are drafted and refined and progressed, meet the task they are designed to hold in this legal framework. There's no point in supplementing with standards that are also in vague terms legislation that hangs on the minister's satisfaction or the delegate's satisfaction. The draft that we have seen of matters of national environmental significance includes terminology like 'aims to ensure decisions provide for' protection, conservation and recovery, and 'aims to promote and enhance' diversity and abundance. These objectives could be 100 per cent successful and have zero effect on actual environmental outcomes. Given the kinds of reports we've seen in the last few years, including Graeme Samuel's report but also the state-of-the-environment report and the national climate risk assessment, replicating the shortfall of excessive discretion in the act, where there is such a promising instrument as national environmental standards, is unacceptable. So the Environment Institute urges this committee to make strong recommendations about managing this discretion in this and in future standards to ensure they do their job, contributing clear, coherent, specific expectations so that everyone—proponents; governments, at the state level too if they're responsible for some of the assessment and approval processes; industry; and communities—can understand what is required and help to ensure that the act works. The other thing that I briefly want to mention in this opening statement is actually not the focus of any of the standards that have been released so far, but Graeme Samuel pointed to a suite of standards in his report as core contributions to the legal framework, and the whole suite of those standards really needs to be put in place straight away to understand how they connect together and how they help to achieve the purposes of the act. I want to point to one in particular because it relates to an area of expertise that the Environment Institute has at Adelaide University, and that's about the compliance and enforcement regime. Some of the penalties in place have been lifted in the reforms. The Wildlife Crime Research Hub, which is based at Adelaide University, has demonstrated that wildlife and environmental crime in particular is a really important, really hidden, underrecognised and increasing source of biodiversity harm across our continent. It's growing two or three times faster than the global economy. These forms of crime include illegal habitat clearing and wildlife trafficking, and at the moment they are very underregulated and can be perceived as low risk and high reward. Illegal wildlife trafficking in particular is the fourth-largest transnational organised crime type, alongside drugs, weapons and human trafficking. Researchers in the Wildlife Crime Research Hub have identified a really large number of Australian endemic species turning up in these global markets. The legal contribution to that research has recognised that laws at the state and territory level are just completely inconsistent, poorly enforced and in some cases ineffective. Achieving a coherent cross-border regulatory framework is a brilliant opportunity through a national environmental standard for compliance and enforcement, bringing together the obligations under the EPBC Act, biosecurity controls and other protections from illegal wildlife trafficking and other forms of environmental crime. So we at the Environment Institute really look forward to seeing drafts of that standard and the others, and to contributing to them. I hope that the committee might take up the task of recommending that the full suite of standards needs to be in place and that they might be really ambitious and do some great things for biodiversity and for the environment. Thank you. CHAIR: Thank you very much. Senator Hanson-Young. Senator HANSON-YOUNG: Thank you all for being here again today and acknowledging that, while we've got the architecture in place, what we now need to do is put in the details. I guess, at first blush, I just want to understand the key differences between these draft standards as outlined, as put forward by the government, and what the department's negotiating and consulting on, versus what Graeme Samuel proposed. Mr Sydes : I guess the specificity in terms of outcomes rather than, as Associate Professor McCormack was just describing, framing in terms of objectives and more process oriented matters is one key difference. The language as well, I would say, is somewhere between the consultation on various policy proposals from the department for standards and the actual drafting of a legislative instrument. There seems to have been a lot of discretionary language that slipped in. I don't know whether that's deliberate and a result of instruction to drafters or just a sort of natural tendency for drafters to draft legislative instruments in a way that maximises executive discretion. But it's not, I would say, an appropriate way to develop these standards consistent with the recommendations from the Samuel review. I think there are some key things missing as well, from our perspective. The idea that climate change and impacts in the context of different climate change scenarios don't come up at all in the core standard for matters of national environmental significance—climate is not mentioned at all in that standard, and I think that's a problem. Professor Samuel also recommended some important things that would supplement or deal with some of the existing limitations of the EPBC Act, providing clarity around the need to consider cumulative impacts or to consider the impacts on key threatening processes in the version of the standard that he prepared. Those things have fallen out of the standard that we've seen. But the principal one is, really, I think there's been a move away to something that's framed in terms of what decisions should aim to do, rather than specifying with clarity the outcomes that are expected for the matters of national environmental significance that the act is intended to protect. Senator HANSON-YOUNG: Were you here for the housing panel this morning? Mr Sydes : No, sorry. I missed it. Senator HANSON-YOUNG: The industry's pitch to us, as I took it, was that they want the rules to be very clear—so clear that they, as an industry representing various developers, can look at a block of land before they purchase it and know whether development on that particular 100 acres would get approved or not. To do that, these regulations would need to do what you've just suggested. They need to be specific, they need to be outcome orientated and the language needs to be less discretionary and more black and white. Have I interpreted what you've said properly? Mr Sydes : Yes, that's correct. That's the win-win, I guess, that was envisaged by Professor Samuel in putting so much emphasis on these standards in the first place. Clarity, as to the outcomes that the act is intended to deliver in protecting matters of national environmental significance, is critical to turning around the failure of the act to actually protect those matters of national environmental significance. That clarity also, obviously, benefits the users of the system. Rather than having a very process oriented system, where you're sort of brought into an ongoing environmental impact assessment system without any real clarity around where you're supposed to end up, you have that clarity set out, as much as possible, from the start so that you can site your projects, design the projects, and navigate your way through the environmental inquiries and so forth necessary to develop the design in a way that's informed by standards and you have clarity about what's expected of you at the end. I suspect where we part company is the form of clarity in terms of environmental protection particularly. My concern is that there will be a lot of pressure from industry and groups saying, 'We want clarity, but not necessarily that sort of clarity,' or, 'We don't actually acknowledge the need for a significant increase'—a step change, as I describe it—'in nature protection.' But we're equally adamant that that is core to the Samuel recommendations. It's one of the pillars that Minister Watt put forward as the key objective of the reform—strengthening nature protection—and that needs to be delivered through the detail of the standards. Mr Schneiders : I have a couple of things to add. I concur with all of that. There's certainly room for improvement to the standards that have gone out for public consultation, both in terms of an assessment against what Samuel was trying to recommend together with the changes that actually came to the legislation after the standards were put out for consultation. I think we all recall the standards were put out for public consultation before the final passage of the bills, and some important changes that were negotiated by the parliament therefore changed the nature of the standards. There's more specificity. Some terms that, on one level, seem not important are incredibly important, such as the term 'consistent', which really reflects the role of the decision-maker, giving the decision-maker the positive ability to apply rules. I think, whether or not things apply and are consistent with Samuel's recommendation, there are changes that need to be made to the standards so that they're going to be consistent with the new legislative regime. That's really important. The points that both Brendan and Phillipa have previously made around minimising discretion are incredibly important for everyone, including industry, as well as the conservation community. There is this basic reality that nature is dynamic and changing, and it is changing in the face of climate change. So, the certainty, particularly that industry wants, is going to be a little bit difficult even with the clearest rules possible, because we're living in a changing world. The natural world is changing before our very eyes. One important reform that deviates a little from what Samuel was recommending in terms of the standards was the incorporation of the concept of unacceptable impacts into the primary legislation. Professor Samuel was talking about that being a concept that needed to be embedded in the standards, but that has been moved over to the primary legislation. I think that's a really important reform. So, being fair to the direct comparison of Samuel's standards versus what's in front of us, there have been some improvements to the original idea that I think are really important to acknowledge. But, clearly, more work on the standards is needed to make it as clear as humanly possible. Senator HANSON-YOUNG: I'm sorry if this is in your submission and I've missed it, but have you put forward marked-up changes that you would like to see the government adopt? Mr Sydes : Not in the submission, but you'll probably hear from various people throughout today that there's consideration being given to priority changes that could easily be done within the architecture of the existing proposals. If it's helpful to the committee and the department, that can easily be translated into a marked-up version. Senator HANSON-YOUNG: I think that would be helpful, to be honest, because I feel as though, during the negotiations of the legislation—Mr Schneiders is right—we put some things that were going to just be left in the standards into the bill so that they're a higher level, which is good. But, the whole way through, there has been this kind of tension around how specific the standards are going to be and—Samuel kept using the word—how granular they are going to be. I understand that, but, without some red marker, it's very hard to pin down how far we need to go. Mr Sydes : I will take that on notice. Mr Schneiders : And it's a decision-maker test. If you were the decision maker—whether a minister or the CEO of the soon-to-be EPA—you've got to look at these documents and go, 'What do these words mean at a practical level, in real life?' That's what's really important. To the department's credit, they have reconvened the technical consultation process for industry, and Brendan and I are happy enough to sit in on that process. So there is ongoing work, too, which is great. Mr Sydes : I'd just add to that point about the decision maker that the other key thing I think this committee should be keen to investigate as part of this inquiry is the degree to which the standards lend themselves to accountability, in the sense of—as you will inevitably do in two, three or five years time—coming back and saying: 'How are we tracking in terms of implementing these reforms? Did the standards deliver?' You need something in the standards to actually say with clarity: 'This is what was intended. This was the outcome that was set out. Are we achieving it or not?' If it's in vague and flexible language, then we'll simply have something like the findings from the Samuel review saying we can't really tell whether the act is achieving its objectives or not because it's really unclear what the act is trying to achieve. Mr Schneiders : That really goes to the importance of EIA again, doesn't it? EIA have been given some of those roles to create a baseline to give us some actual database that tells us whether things are getting better or not. Think about all the incredibly depressing State of the environment reports that have been published regularly since the mid-1990s. One of the features of those environment reports, despite often being brilliant pieces of work, is there's not a consistency; you can't actually track against a series of criteria whether things are getting better or not. Things clearly have been getting worse, on many degrees. Having the ability now, through EIA, to say, 'These are the matters of national environmental significance, and this is the baseline of where their health is right now,' and being able to monitor that on a regular basis through the two-yearly reformed State of the environment reports, is going to be incredibly important because that's going to be the ultimate test. More reviews, as Brendan said, will tell us something, but the actual test is what's going to happen in the natural world. Senator HANSON-YOUNG: And we know that the legislation itself requires a statutory review in five years time now, so what are going to be the things to make that worthwhile? Mr Schneiders : 100 per cent. Senator HANSON-YOUNG: Philippa, did you want to add to some of that? Prof. McCormack: Just very briefly. The idea of bioregional planning has been pitched as an idea that would offer a solution for the housing comments that you mentioned earlier, but I wanted to mention the fact that, if we want the certainty to look at a particular parcel of land and say, 'I can in fact develop on that land,' we also have to accommodate the possibility that it might be, 'I absolutely, definitely can't, even though it would be convenient and desirable for me to do so.' So the certainty of a yes comes alongside the certainty of occasional noes, which is a really important test for these legal reforms and an important way to see whether they are in fact working: do they ever say no? I think the other thing is, when we look at planning at that granularity, as you said, like when we think about looking across a landscape and identifying with certainty whether an area can be developed or whether an area can be the subject of restoration, we know from past experience that that requires enormous investments of money and time and effort. The folks working within Environment Information Australia already are probably working extremely hard with a great deal of difficulty to define what it might look like to understand what areas must, under every circumstance, be protected, particularly as the background context is changing with climate change and other drivers of change, including bushfires and droughts and floods and storms and so on. So I think that, as part of the process of addressing that submission, tools like bioregional planning might play a role in that, but the Australian government does need to recognise that that level of certainty requires quite a lot of resourcing, quite a lot of information and the opportunity to say no in some circumstances. Senator HANSON-YOUNG: You mentioned some of the things that are missing. There's the issue about the lack of clarity of the wording, the discretionary language and the lack of specificity around the outcomes, but then you said there are some things that aren't even in there. You've said the cumulative impacts have kind of fallen away. I guess this goes to Phillipa's point. With the climate impacts, can we just be clear about what you're talking about there so we don't allow it to be used against—I think the point you're trying to make is that we're not asking for climate considerations for a project; it's for the impacts on the animals and species we're trying to protect. Mr Sydes : Correct. We're not seeking to rehash arguments that we've run thoroughly through the legislative reform process. The starting point for what I was suggesting was what Professor Samuel recommended, which was that, at the very least, when you're considering avoidance and mitigation, you should be doing it in the context of different climate scenarios. There is some mention of that in the offset standard, but I just think it's striking that we've got a standard for matters of national environmental significance that doesn't mention climate change, including that very specific recommendation from Professor Samuel. If it is broadening it out, I'd probably include something slightly broader like: 'When you are considering impacts, you need to be aware that we are in a dynamic and changing situation in relation to climate with climate change and potentially catastrophic events. Different scenarios and different possibilities for the very near future and the distant future need to be considered when you're considering impacts.' I would also add, if we're persisting with this model of setting out high-level objectives in the standards, that an objective needs to be to ensure—to use the language that's currently in the standard—that decision-making promotes resilience in the face of climate change. Those two things are squarely within the management of impacts framework that the impact assessment and approval regime of the EPBC Act deals with, which is responsive to climate change without straying into that territory of saying there's a whole range of other broader climate considerations that should be at the heart of our national environmental laws. I still think they should be, but I am recognising that the standards are being developed within the framework of the legislation as reformed by the parliament last year. Senator HANSON-YOUNG: You've been involved in some consultation with the department about these two standards that have been released in draft form. They've reconvened this consultation group. Is that— Mr Sydes : Lyndon has been involved in this as well. There's obviously all the discussion around the standard that Professor Samuel produced more than five years ago now. Senator HANSON-YOUNG: There's been a lot of consultation. Mr Sydes : There's been a lot of consultation and discussion about that. The government, in its last term, with Environment Minister Plibersek, committed a standards working group to the reform of the EPBC Act in early 2023 with lock-ups, other consultations and last-term roundtables. Through all of that, we've been considering different proposals for standards and what should be in them and so forth—not necessarily the final legislative instrument, which was only released late last year. As Lyndon has pointed out, and we welcome this, there's now a continuing commitment to at least some targeted consultation with groups and interested industry bodies that have been heavily involved in the process throughout. So the discussion is continuing. Mr Schneiders : Which isn't a surrogate for a public process. Mr Sydes : Absolutely. Mr Schneiders : Public processes are going to have to be rolled out under the new regime as well. A bunch of the people who are before you today are all sitting around on the same zoom call once a week talking about these same technical matters. Mr Sydes : What we're lacking at the moment, if I could extend on my answer, is clarity about the total package and how that's being pulled together. It was very useful for the government to exhibit some proposed standards in conjunction with the legislation last year so that we could get a bit of insight as to what was proposed. There has been a departmental-led consultation process on those exposure drafts, but, as Lyndon has just indicated, there is a statutory process for developing these and, I think, at least three other standards that are proposed that will play out sometime in the next few months. That also needs to be considered in the context of a whole range of other regulatory instruments that need to be prepared, including, critically, regulations that specify which decisions the standards will apply to. What the government is prioritising in terms of the rollout and so forth is really important to our understanding of the total system. That's in the works, I understand, but getting that information would be really useful as well. Mr Schneiders : And this really highlights the pitch to the committee, and of course to the government and the executive and the ERC, for the funding to make this stuff real. The reforms are substantive, and so to be effective they are going to have to be substantive and they are going to need to be resourced and they are not going to be perfect. In defence of the Public Service, particularly the environment section of DCCEEW, it has not necessarily been the flavour of the month for a number of governments over the past 25 years and has not had investment in it in the way it should have been in terms of building up the expertise, the data and the standing that it really should have. There's a big job to rebuild the capacity and the expertise and the breadth of knowledge required inside the department. Money doesn't buy everything, but, boy, it helps. If you systematically underfund an environment department for a generation, it's pretty hard for anyone from outside to point the finger and say, 'The Public Service is useless.' It's actually a design feature, underfunding it, and it's about time we started to fund this department and these roles in the way that the community would expect. Senator HANSON-YOUNG: Thinking about the decision-maker and how the decision-maker uses these standards, I'd like you to reflect on the language that's currently in there, that the standards require decision-makers to use 'best available information' rather than 'appropriate and suitable information', which is what the Samuel review proposed. Are you worried about that? Is that an example of the discretionary or the not-tight-enough language that allows proponents to get off the hook in being clear about what the impacts will be. Mr Sydes : Sorry, I'm just looking to see if Associate Professor McCormack wants to lead us off. Prof. McCormack : That's very generous, thank you. I do think that a standard on data and the information that underpins decisions might be really useful in defining what best available evidence or best available information might mean in any given context. Perhaps this is my ignorance, but I don't feel like that is a deal breaker for great decision-making. A person who seeks out the best available information to them and then uses that information to underpin their decision-making will be using great information and so that could be done well. In many cases, the decisions fall over in terms of their capacity to protect the environment, not because great information is available. Quite a lot of the time, it's because the act doesn't require a decision that protects the environment. So to the extent that we could fix that as a starting point, that will be really profoundly valuable. Senator HANSON-YOUNG: So it is more about the outcome rather than the process. Mr Sydes : Yes. Prof. McCormack : Absolutely, it's about the outcome. Mr Sydes : There are other examples in the drafting that really do create a risk that there's a level of flexibility and discretion built into the standard, and there's another layer on top of that in the sense that the decision-making will now be, hopefully, required to be consistent, but still to the 'satisfaction of'. There is a risk there that there's just so much variation possible in the system that it's not delivering that clarity and certainty that this new standards based approach is intended to deliver. Mr Schneiders : Without being a broken record, it is remarkable what information can be gained when the investment and the political will is put in place. We hear all the time about the remarkable advances in technology, remote sensing, the use of satellite data and lidar and things like that. During 2024-25 I was quite closely involved in the advisory group that was considering the establishment of the Great Koala National Park on the North Coast of New South Wales. In that instance, when the New South Wales government got serious about trying to understand the three dimensions of sustainability—in that instance in particular, it was both the economic impacts of change and the environmental values sought to be protected through that process—a proper investment in resourcing yielded extraordinary results within 12 months. Getting the technology out into the forests to go and find the animals and establish their health, their condition, their numbers and their status was quite incredible. It's not like the ability to accumulate the information isn't there; it's about the resourcing and the political will to make it happen, which is— Senator HANSON-YOUNG: And the will to use the information. Mr Schneiders : Yes; 100 per cent. Senator HANSON-YOUNG: Going to a real-world example: this legislation has passed, and we're now in discussions about how we put in place standards that realise those outcomes properly. Perhaps this is for the ACF: are you concerned at some of the decisions that have been made by the minister since the legislation passed at the end of last year? Mr Sydes : Yes. There are two that I can specifically mention. One is the recent decision around Alcoa, in south-west Australia. I was shocked to see the national interest exemption used in that way. It hasn't been used to create a grace period in that way in the past; particularly, it hasn't been used to provide that facility in the mining sector. It was on the back of the explanation by the minister around the purpose of that exemption in the debates last year. Although he was later clear that it wasn't restricted to national security and national disasters, it was the flavour of when it would be available—so using it in that way was quite extraordinary, particularly, I should say, on the back of, by the sound of it, 15 years of the department pestering Alcoa to comply and Alcoa saying, 'We don't think we need to,' and the department doing nothing about it. An outcome that then saw the minister grant that exemption was quite extraordinary. I'm keen to find out more about the background of the decision and what the alternatives might have been. The other decision—which I think was made under delegation, so I'm not quite sure of the degree to which the minister was involved—is a recent decision in the Northern Territory to allow thousands of hectares of bushland to be cleared for agricultural development without needing to be assessed under the EPBC Act. Once again, without knowing the details—and we don't have reasons for that decision yet—it seemed extraordinary to me, particularly against the background of noncompliance and community, including traditional-owner concern about the proposal, that the department would say, 'We can be satisfied at the referral stage that this is something that doesn't need to be assessed under the EPBC Act.' Senator HANSON-YOUNG: To clear savanna woodland to put in place cotton. Mr Sydes : Correct, yes. It's an agricultural development project to establish a cotton enterprise. Senator HANSON-YOUNG: I'm quite shocked by that decision in the Northern Territory as well. Mr Schneiders : It's not an awesome precedent. Senator HANSON-YOUNG: No, it's not an awesome precedent. Mr Schneiders : It's a bad decision, I reckon. I agree with Brendan and the ACF position; it strikes me as almost barking mad not to at least do a proper assessment of it. The only thing I can try to draw some hope from is that a lot of the components of the reform package aren't being turned on properly until the end of this year; that's the nature of the size and the scale of the reforms. We don't actually have an EPA until at least 1 July, the statutory independence of EIA doesn't kick in until a similar time and a lot of the important provisions inside the legislation don't occur until about 1 December this year—so the optimist in me is hoping we are living in a hinterland where we're moving from one reality to a different reality. But they're not awesome decisions, that's for sure. Senator HANSON-YOUNG: I also hope there's not a desire within department ministers' offices to get bad decisions made in this twilight period; that is totally out of step with what these new laws say and, I would argue, well outside the spirit of what the parliament has put forward. Mr Sydes : Yes, I'm not sure whether that's a phenomenon here or not. As I said, I am keen to see the reasons. But another concern that we have is this general trend towards front-loading—that is, dealing with referrals at the referral stage before they hit the public system and then providing proponents with reassurance that they can get an approval very quickly under the system. That may be appropriate in some cases, and the standards based approach is intended to encourage that, but there will always be circumstances where a level of scrutiny and public consultation is appropriate, which is why our commitment to the public consultation standard is important, because it's going to be one of the ways, I imagine, to ensure that that occurs properly under this new regime. Senator HANSON-YOUNG: Thank you. CHAIR: Senator Walker. Senator WALKER: I've got a few quick questions for the witnesses, and I'm happy to hear contributions from anyone that has something to add. I'm wondering how you think the standards can balance prescription and flexibility to prevent them becoming these inflexible rules that could override local ecological or planning contexts. Mr Sydes : In the original conception from Professor Samuel that we've been talking about, an outcomes based approach, you create the opportunity to do that. You provide clarity as to the outcomes without necessarily being prescriptive about exactly how you get there. There is that level of flexibility built into it, while also being very clear about the outcomes. The flexibility I am concerned about is the flexibility that means—whether an approval should be granted or an accreditation be made—it becomes a case-by-case negotiation, as it is now, heavily dependent upon who the decision-maker is and, frankly, who the environment minister is at any particular point in time. That's the negative aspect of flexibility that the standard should avoid. Clarity as to the outcomes, which we've been advocating for, is the key to ensuring that—as I said, there may be multiple paths to reaching the outcome, but the outcome itself is very clear. Prof. McCormack : The flexibility question is a really important one. It's difficult because, as the climate changes, it won't be possible in the way that it used to be possible to protect some things as they are, as they have been for hundreds of years. We have examples of legal instruments that protect things that change. I would point to fisheries law; we talk about sustainable catch, and there are ways we use the data to tighten controls on catch limits until new data is available. It's a context where there's the opportunity to shift the boundaries of some protected zones in ways that are consistent with the movement of species—that is on land, of course, but it's not beyond the law to accommodate flexibility and nevertheless hold high standards for protection and high levels of certainty for proponents. We might need to be a little bit more creative and a little bit braver than we have been in the past as we set up these instruments. Mr Schneiders : Regional plans, regional plans, regional plans—that is what I reckon. It is very difficult to achieve because the regime that we have existed under, the EPBC Act, for almost its entire history has been site-by-site battles. Development proposals will be put into the system. They will be looked at through the context of the impacts of the individual development on an individual MNES. There will be no rules and guidance, there will be unreliable data and then there will be mass contestation. That's been the reality. Because that's been the reality, trying to do proactive conservation planning or landscape conservation planning never happens. The department is always underresourced, and it's always punch drunk because it's dealing constantly with developments. That's scary stuff—economics versus environment—right? That's been our reality for the last 25 years. It's site-by-site pitched battles, lawyers at five yards and contested data. Regional planning, if it is done properly, and if we can find the mechanisms to ensure cooperation between the jurisdictions of government, landholders and affected interests, including First Nations interests, offers such a better way of thinking about environmental protection, restoration and economic development. The ability to move from the specific individual development to look at the ecological features and the cultural features of a region and to understand what their values are, the extent of the values, the opportunities for restoration, the opportunities to make offsetting actually work, as distinct from buying helicopters, which was interesting—all of those things come if you take a view that goes higher than the individual development proposal. I've been banging on about this, as have many others, for 20 years now. It's an incredible opportunity; it needs to be resourced, particularly by the Australian government, and it needs to bring the states along. The states want to do it, they say, but resources are always the answer. You've got two new reforms sitting inside the package—the bioregional guidance plans and the more binding statutory plans. Many of the legislative policy roadblocks that have existed previously have been smoothed over by the new reforms. Our focus into the medium to long-term really should be getting the regional planning systems in place and finding those genuine win-wins that everyone talks about. Senator WALKER: My next question has been touched on a little bit today, but, in your view, what institutional arrangements do we need to make sure standards are being applied consistently and credibly over time? Mr Sydes : The new National Environmental Protection Agency is a really important reform and will play a really important role here, provided it's delegated the powers by the minister, which I understand is the intention. It will be responsible for the bulk of assessments and approvals in the way that the department is now, so it will be at the front line of applying those standards at the project level. That's a critically important role that they have in terms of bringing the standards to life and ensuring that they're meeting their intended objectives. The EPA will also have important assurance functions. Where regional plans are in place or accreditation arrangements are in place, the EPA will have a standing assurance role in terms of providing, I think, five-yearly assurance reviews, and also the ability to conduct those reviews at other times if it determines it's necessary. They become the custodian of the standards from that point of view, in terms of their application at the project level and the more systematic application at the level of those accredited regimes. A strong, well-resourced, politically supported NEPA, or National Environmental Protection Agency, is the critical institutional reform, partnered with the Environment Information Australia reform, which is already operating within the department but gets an extra statutory foundation with the commencement of the Environment Information Australia legislation in the middle of the year. Those two complementary institutional reforms are game changers, if they're done well and if they're properly resourced. Mr Schneiders : There's this idea that the Australian government has a particular responsibility—its treaties powers drive the head of power to create this legislation. But making sure that there is someone who is defending the federal responsibility around the protection and management of these matters of national environmental significance is absolutely critical, and that's where those institutions become really important. Senator WALKER: I have one last question. In your view, what would success look like in five years, after the introduction of the new standards? Mr Sydes : That's a very good question. I think we're turning around habitat destruction. There's still extensive habitat destruction occurring across Australia that's not entirely within the Commonwealth remit under the way that the EPBC Act works, but it is central to it—so effective regulation of habitat destruction, particularly in the agricultural sector. I think there's now a foundation for that with the changes that have been made and the changes that are to come with these reforms. I think we need to see some threatened species' trajectories being turned around. That happens through more effective protections—through the impact assessment and approval system—but it also happens through, hopefully, better implementation of some of the conservation planning aspects of the EPBC Act as well, and funding recovery and so forth. We've just got used to this continued decline of threatened species and continued additions to the threatened species list under the EPBC Act. I'd like to see us getting to the point where we're saying that we can actually see that species are recovering and getting off the list, and that that number is growing because efforts to protect, and also restore, habitat for those species is proving effective. Mr Schneiders : Yes. There's the measurable environment, which is partly what Brendan's talking about—the measurability of change and improvement. Even though there's a lot of bad news in Australia about the environment from time to time, there have been some very notable examples of success. The impact of the ending of whaling, for example, is an extraordinary conservation achievement, not just here but around the world. The cleaning up of the cities has been an extraordinary achievement. We know that it's possible. But those real markers and having confidence that the health of the environment is improving are going to be really important. But I also think that—and Samuel really did talk about this, as did Allan Hawke 10 years previous to that—trust and faith in the system from all stakeholders is really essential. The nature of politics, as you all know better than us, is that it thrives off contestation. If we get to a point where industry, community and the states are all in a position where they respect that the system's working, and it's demonstrably working on a series of economic criteria, together with the improvement in the environmental health of MNES, then that's success. Senator WALKER: If there's nothing else, that's all. Senator BRAGG: Thanks very much for being here. My main question is: what type of development do you think would be appropriate at this point in time when we are living through a massive housing crisis? I'm happy to open these questions to anyone who wants to field them. Mr Schneiders : I'm always happy to have a crack. There are a whole bunch of legislative requirements now around the guardrails for future economic development, whether it's housing, mining, agriculture or any form of development. They are around making sure that we're going to have consistency with outcomes based national environmental standards. I think the first answer is to get the standards in place. There's now a legislative and statutory requirement that decision makers, whether they're a minister or a CEO of the EPA for a delegated power, have to apply decisions consistent with the national environmental standards. I think that the No. 1 priority is to get the standards in place, get them through the parliament and start implementing them—100 per cent. The second one is getting in place a trusted offsets regime. One of the biggest issues for housing, as you know, is contestation over the offsets regime—the inability to find like for like. There have been pretty well documented cases of offset schemes that look, frankly, disastrous, in terms of Western Sydney and elsewhere, where rubbish dumps and various other things have been claimed as biodiversity offsets. Rebuilding some faith and integrity into the offsetting scheme, when development is going to happen, to ensure that there is actually an offset scheme that works, and having consistency with those standards, is important. I think that's the answer. If we're going to go back to a regime where we basically say 'There is a crisis,' whether it be a housing crisis, a defence crisis or a climate crisis—whatever the crisis is—'which means we have to bend the rules,' then we haven't really done anything that Samuel said we should be doing. What Samuel was telling us to do, and I think it's fair—and this is what Hawke said before it—was we need a rules based order where there is consistency and transparency around decision-making and there are clear outcomes both for the environment and for the economy. I think that's the most important thing, and if we can get those standards in place, if we can get those regional planning and strategic assessment processes in place, and if we can get an offset system that has integrity then we're halfway there. Senator BRAGG: Do you think the definitions are sufficiently clear in terms of unacceptable impacts and the offset regime? Mr Schneiders : We did advocate really hard for quite a lot of detail around the meaning of 'unacceptable impacts' and the interpretation of 'unacceptable impacts' against the matters of national environmental significance, and to ensure that they were in the primary legislation. That, subsequently, was the case. Industry didn't love that; they thought that they needed a bit more flexibility and what have you, but I stand by the advocacy and the approach we took there, because that is how you get the clarity and replication of decision-making. One thing I will say is, the importance of this technical group process that DCCEEW has re-established is that it genuinely enables people with expertise and background in conservation and environmental law and policy, as well as in projects—whether they be miners or property developers or whatever—to reality-test the words on paper into a real-life setting. The power of doing a genuinely consultative process is to go and test what a bunch of words on a piece of paper say and what they look like in real life, and then what outcomes you're going to get as a country by going through this reform regime. Mr Sydes : We strongly supported defining 'unacceptable impacts' in the legislation. The final wording is not the final wording that we would have necessarily put forward—it does introduce some new concepts usefully but it also adds some lack of clarity and uncertainty to the conventional understanding of 'unacceptable impacts' because of some of that wording. It is what it is. It has been passed by the parliament now. I note that it has been diluted somewhat with the passage of the bills through the Senate, as a result of some amendments put forward by the government. The point I would make in relation to unacceptable impacts is that, as useful as it is, it's really important to have those red lines really clear in the legislation. Defining 'unacceptable impacts' is something that screens out the worst of the worst, as Minister Watt said while explaining the concept of 'unacceptable impacts'. It stops people doing things like proposing to mine under Uluru; it's not a substitute for being clear about the outcomes that the system is supposed to deliver. It shouldn't be taken to suggest that anything that's not unacceptable should automatically be thought of as something that can be offset, because that's simply not the case. There are ecological experts that will follow this session who will, I'm sure, be happy to elaborate on that. Senator BRAGG: What about in relation to the offsets and the other component parts that are still in draft instruments? What do you make of the definitions there? Mr Sydes : The offset standard at the moment is a useful starting point, but there are some specific areas that will need improvement. We highlighted in our submission that the baseline needs to be an absolute one, rather than a declining one, because if you're continuing to assess things against a declining baseline, you're just locking in decline. We have some significant concerns about being crystal clear around what security is required for offsets, because that has been a big problem with the legislation. Others to follow will, I'm sure, be happy to elaborate on the offsets question. You've got some international experts on that coming up. The other point I'd make around the offset standard is it's one part of a broader framework around offsets in this new system, and we haven't seen the detail of a lot of that other material yet. For instance, the legislation says the minister can, in regulations, define 'net gain'—that's critical to understanding how this offset regime is going to work. The minister can also use various things to determine what can and can't go into the payment in lieu and the restoration funds system, so that will also be a critical determinant as to the success or otherwise of the system. There are quite a few moving parts to the offset system. The standard itself, as I said, is a useful starting point, but it does need improvement. But we also need to have a clear understanding about the rest of the subordinate regulatory framework, which is essential to understanding how that whole system is going to work. Offsets are never, in my view, an optimal answer to a biodiversity impact. They are there to try and resolve—or compromise on, I guess—environmental outcomes to allow development to proceed in a defined set of circumstances. There are always challenges in designing that system in a way that delivers integrity and doesn't see you slipping into a situation where the answer ought to be no, or, 'We can't find an offset,' or, 'It's difficult to find an offset here because we have basically lost most of this habitat already.' The answer in those circumstances should be protection rather than an offset. Senator BRAGG: The point here is, though, that we do have a housing crisis. I'm keen to elicit your views on what would be the best way to facilitate home construction balanced against the need to protect the environment? What I'm hearing is that there are some principal matters dealt with in legislation, then we've got these draft regulations. I guess my question is that, if you wanted to try and move housing supply forward whilst protecting the environment, what would be the best standard to have in the regs which would facilitate that? Mr Schneiders : In the reality in which we exist, I reckon the No. 1 answer, always, is the best data. If the Property Council and UDIA—I also missed their presentation earlier today, but we have been hearing their perspectives through the various consultations and technical processes. If what they really want upfront is knowledge about is it a yes or a no, then the primary determinant through EPBC is a question of the impact on matters of national environmental significance and then the available remedies. Obviously there's a decision tree that sits under the way the legislation has been created. There is a primary decision: is it an unacceptable impact? If it's an unacceptable impact, then it's an unacceptable impact, and you've got to find a different way of doing that development. If it's got a significant impact that's manageable, then you're really going down the system of making sure you can get the offset regime in place, you can get the reliability and the consistency around the decision-making and you can get the decision-making expedited in the right process. But it's the reliability of the information upfront. Going back to all the reviews, it's all been the same. If there isn't a source of truth that can be tied to the outcome sitting under the legislation, then it's almost impossible for a decision-maker to make decisions, and it's almost impossible for a developer to anticipate whether or not to proceed. Senator BRAGG: That was helpful. So what happens in the new world? Does this EPA make material judgements? Mr Schneiders : The first step is having EIA develop the datasets that are available for proponents and community. That is the No. 1 imperative here. Whether it's the developer or the landholder or whoever, when they are considering the development process and entering into the EPBC process, having reliable data upfront that says: 'You know what? This place here is crawling with koalas and crawling with gliders and crawling with endangered pieces of vegetation community. Maybe it's a good idea to consider that in terms of (a) proceeding, or (b) in the design of the proposal you're doing,' has got to be, always, the starting point. That's where all the different pathways around the level of assessment come into play. So do you even have to do a major EIS? Do you have a self-referral process? Do you just rely on a state process that's been accredited? All of those opportunities are now sitting there under the new reforms, but they start with that first most important piece of decision-making, which is what are the impacts on MNES in this region and in the development footprint of this new proposal? Senator BRAGG: What's your expectation about what this EPA will do? Mr Schneiders : Ultimately, it's been given a series of roles. Obviously, there was a lot of commentary over the last four years about Samuel not recommending an EPA, but he was really clear from the outset. He recommended three different roles, drawing on all the experiences that were put in front of him over an 18-month period of consultation. One was enforcement and compliance. They're two different concepts but the same. They're related on the idea that if a project is approved you've got to make sure someone's ensuring that the conditions are being carried out. That was one of his main findings of the first review, that there was no faith in the system because there was no compliance or enforcement—because there were no resources sitting inside the department to actually do it. Enforcement and compliance are really important roles. That builds community interest. It also puts an obligation on the other layers of government and also on the developers to make sure they are implementing the conditions that are attached to development. Conditions are a gift, as the saying goes. The second part is assurance. Senator BRAGG: Would the EPA operate at the behest of the elected government, or would it be independent? Mr Schneiders : That's the point of it being independent. That's one of the functions, that it has retained its independence. A number of us were advocating for an independent decision-maker around individual projects, and that subsequently wasn't the position of the parliament, that that would be supported. But it will be an independent decision-maker once it gets set up, in terms of compliance and enforcement powers. The other important role it's got is assurance. The benefit that industry, as you know, have been seeking through the reforms is the idea that, potentially, they can get to a point where there's a single decision-maker, whether that is at the federal level or at a state and territory level. That has been the Holy Grail for industry now for 30-odd years. One of the reasons it hasn't occurred is we haven't had a bunch of other safeguards in place, like the environmental standards, which, again, was one of the reasons why Samuel recommended them. He said that it's impossible, for example, for the federal government to delegate powers that have been given to it through the Constitution to a state unless it could be satisfied that, in fact, those responsibilities were being transferred to another layer of government. That's why the standards have been so important and why they're hardwired into the legislation in the new regime and were central to Samuel's proposition. The second important thing that Samuel was recommending was that there still needs to be some sort of oversight by an independent body, to make sure that, if state regimes are accredited, those responsibilities and those powers that are being transferred to the state are being enforced. That's where assurance becomes incredibly important. Senator BRAGG: It sounds very bureaucratic—lots of assurance. Mr Schneiders : It sounds like the law. Senator BRAGG: What about the reduction of the regulatory burden between the Commonwealth and the states? Mr Schneiders : That's what I'm saying. We could easily get to a situation— Senator BRAGG: Is there any chance that we're going to have— Mr Schneiders : We could easily get to a position, with the EPA, where there is a single development approval process. It is actually a safeguard. The reason why you haven't had single-touch approvals for the last 25 years has been the inability of the Australian government to demonstrate that it could delegate those powers, the approval powers, to a state. The ability to do that, if that's an outcome that is being pursued so that there is one single decision-maker, is entirely dependent on having an assurance body, like an EPA, maintaining scrutiny of the state. Senator BRAGG: Just so I get this on the record, your view is that the more that Canberra does the better? Mr Schneiders : No, I didn't say that at all. My view was, constitutionally, if industry wants a single decision-making pathway, there is no reality under the law where the feds can just walk away. But they can empower an independent body, such as an EPA, to stand in those shoes, to ensure that the national interest, in terms of the protection of matters of national environmental significance—which only the federal government has—can be protected. Senator BRAGG: But, ultimately, it would be a Canberra appointed bureaucracy. You want it to be with statutory appointees, and they wouldn't be able to make material judgements along the way—if not at the approval stage then perhaps later on. Can you see the risk that this might actually stymie development? Prof. McCormack : May I just very briefly jump in? Mr Schneiders : Yes, go for it. Go ahead. Prof. McCormack : I'm mindful of the fact that we have run out of time, but I just very quickly wanted to say, Senator, that I really appreciate the fact that you're concerned about the housing crisis. It's really important. There are two things about that. The first is that, when drafted effectively and working effectively, the precise purpose of the national environmental standards should be to ensure that state government decision-making can be lifted to a standard where it meets both national and state obligations and requirements so that we might improve the process at one scale of government and minimise all of that bureaucratic oversight. That should be the purpose of these—that everyone does a really good job and we make great standards so that we would expect good decision-making. It could be done by one group, with the assurance role provided by the independent EPA. The other point that I really quickly wanted to make is that environmental law has a really important role to play in housing. But the housing crisis is not an environmental law crisis. Environmental law doesn't exist in a vacuum, and the housing crisis may be addressed, in part, by really clear standards for environmental law operating at state government scale with the assurance role. But it is also a tax question and a transport question and an investment question. There is a role to be played here. But environmental law is not an absolute barrier to housing. Perversities and incentives play, I would suggest, a much more significant role in how those things progress and in the extent of damage and/or the extent of the solution that they provide and how that plays out. Senator BRAGG: Thanks, Chair. CHAIR: There's a clarifying question from Senator McLachlan, and then we are going to go to a slightly shortened break. We're running a little bit behind schedule. Senator McLACHLAN: Just following on from Senator Bragg, one of the things Samuel was concerned about is cumulative decision-making. You have a series of decisions being made on a variety of projects, and the accumulation of those is that we're going backwards in relation to environmental protection. When the new legislation is applying, do I, as a senator, get assurance in an annual report from the new regulator that holistically, across the country, we're in credit with the environment? Where does that get captured if all the standards are working well and the legislation is operating smoothly? That's to anybody who wants to jump in. Mr Sydes : There are a couple of things to point to in response to that. One is that the EPA will be a listed Commonwealth entity and will be required to report to parliament on its performance. I don't know that that necessarily covers the detail that you're talking about. Environment Information Australia will have an important role in terms of that data and monitoring and more regular state of the environment reports. That's perhaps partly responsive to what you're pointing to, I would say. Cumulative impacts are, I agree, important. In pointing out one of the problems I thought there were in the current MNES standard, I pointed out that they're not mentioned. They are sort of gestured at, in the sense that there's some discussion about context and the need to consider context in the standard. But making it clear that there's a specific requirement to consider cumulative impacts and avoiding cumulative impacts as one of the outcomes would then create the foundation for that monitoring and evaluation about how successfully the system is doing that, I would suggest. Senator McLACHLAN: Would anyone else like to make a contribution? Mr Schneiders : It's worth talking to DCCEEW about that as well this arvo, in terms of their proposed reporting mechanisms. But, yes, the set-up of EIA has involved a whole bunch of new reporting to first create a baseline and then to measure whether or not that baseline is being met in terms of the improvement in the health of MNES, which again, goes to the primary point of the legislation—the protection, management and restoration of matters of national environmental significance. One of their first jobs is to start to establish the baseline for each of the eight or nine MNES that are relevant. I think only X number of them can be measured because some of them are about processes rather than about specific things like world heritage, national heritage, endangered species and what have you. The second component of this is building that measurement into the state of environment reporting because that hasn't always been the case. Each state of environment report often has quite different methodologies and describers around what's happening out there in the environment, some of which haven't always been matters that are the primary responsibility of the Australian government. I think they'll have a long answer for you, but they are the two reforms that have been proposed in terms of developing trendlines. Senator McLACHLAN: Thank you. CHAIR: On that note, I would like to thank the witnesses for the evidence today and the obvious preparation that's gone into both the submissions and the evidence given. If you've taken any questions on notice, please provide your answers to the secretariat as soon as possible but, in all events, no later than 6 March. We'll take a short break now. To the witnesses who are waiting, I apologise for running a little bit behind schedule. Proceedings suspended from 11:40 to 11:51 .