Processes for developing environmental offsets
While Chapter 3 has explored some of the principles underlying environmental
offsets, this chapter examines some of the key issues raised in relation to the
processes for the development and assessment of environmental offsets in
federal environmental approvals, such as:
timing of approvals in relation to offsets;
the need for greater transparency;
methods for assessing and calculating offsets; and
the need for more strategic and consistent approaches to
Many of these issues relate to principle 7 in the EPBC Act Offsets
Policy, which states that suitable offsets must be 'efficient, effective,
timely, transparent, scientifically robust and reasonable'.
Timing of approvals in relation to offsets
The EPBC Act Offsets Policy states that:
Offsets must also be timely. That is, an offset should be
implemented either before, or at the same point in time as, the impact arising
from the action. This timing is distinct from the time it will take an offset
to yield a conservation gain for the protected matter, which may be a point in
As explained in Chapter 2, the Department of the Environment (the department)
submitted that environmental offsets are considered during the detailed
environmental impact assessment process, following the exploration of all
potential avoidance and mitigation measures. Offsets may then be included as
part of the conditions of approval for a particular action, where residual,
unavoidable impacts are considered significant.
However, several submitters and witnesses raised concerns in relation to
the timing of the consideration of offsets. As outlined in Chapter 3, there
were concerns that avoidance and mitigation measures aren't being fully
considered, and offsets are used as a first, rather than last, resort. Additional
concerns were raised that approvals are being given prior to offsets being fully
identified and/or secured.
Submitters and witnesses stressed that there is a need to ensure that
offsets are fully identified and in place earlier in the process, and in
particular, prior to approval being given.
For example, Mr Des Boyland of the Wildlife Preservation Society of Queensland (Wildlife
Queensland) told the committee that 'offsets should be clearly identified at
the time approval is given for the development'.
However, Mr Brendan Sydes of Environmental Justice Australia, told the
committee that conditions on approval are often 'framed around offsets that are
yet to be found and yet to be delivered'. Mr Sydes suggested that the process
should be changed to 'to insist that the offset actually be there and secured
and available prior to the activity occurring'.
Ms Georgina Woods of the Lock the Gate Alliance described the granting
of approvals prior to securing offsets as a 'systematic and repeated failure of
the offset policy', suggesting that:
...the signing of an approval by the minister should be the
last thing that happens before an impact occurs, before a development begins.
But increasingly approvals are given with elaborate conditions that then entail
18 months, two years of backroom negotiation between the Department of the
Environment and the proponent of the development to continue massaging the
Lock the Gate Alliance also pointed to comments from the UNESCO
Monitoring Mission for the Great Barrier Reef World Heritage Area that in
relation to offsets from projects impacting on the World Heritage Area:
Notwithstanding the mission's concern...regarding the principle
of offsets, it is not clear why the offset plan is not to be prepared and
approved before dredging is authorised to proceed.
The Friends of Ken Hurst Park submitted that 'an environmental
offset must be implemented or commenced prior to any development occurring'.
Friends of Grasslands agreed that offset programs should be in place 'in
advance of any development commencing':
Unfortunately, the reverse is generally true; offsets may be
decided at the time of the decision to proceed with the development, in some
cases requiring only that a nebulous offset package be developed in the future...
Greenpeace Australia Pacific (Greenpeace) agreed that offsets 'should be
established prior to approval of destructive activities'.
Mr Walters from Greenpeace expressed concern that 'offsets are often developed
after the approval is given under the EPBC Act' and that approval conditions
often require an offset plan or strategy to be developed after the EPBC
approval is given.
Indeed, a commonly raised concern was that approvals often only require
an offsets plan or strategy to be developed, rather the offset itself to be
identified and secured.
For example, the National Environmental Law Association (NELA) submitted that
approval for clearing for the Galilee Coal project (discussed further in
Appendix 4) was 'conditional upon completion of the Offsets Management Plan,
but not on securing the offsets themselves, which could be done up to two years
after the area was destroyed'.
Submitters and witnesses gave other examples of development approvals
being given without the offsets needing to be in place prior to the development
This included the Abbot Point development, discussed further in Appendix 6, where
'the condition of approval on an offset was to prepare an offset strategy'.
The Whitehaven Coal Maules Creek Project, outlined in further detail at
Appendix 3, was also highlighted, because it was suggested that the approval
was worded in such a way that there was no need for offset conditions to be
satisfied before clearing commenced.
NELA noted that, for the Curtis LNG project (discussed further at
Appendix 5), no deadline was imposed for actually securing offsets.
Mr Jan Arens, President of the Gladstone Conservation Council, further noted
that, in the case of a project where a condition of approval was to develop an
offset plan which was required to be made public, he had not been able to
Transparency issues relating to offsets are discussed further later in this
However, the NSW Minerals Council disputed this evidence. Ms Claire
Doherty argued that offsets are developed 'while you are developing your
approval and they get assessed...It is unusual to get to the end of a project,
get an approval and not have any of your offsets identified'.
Ms Doherty also explained that:
Usually, by the time you get your approval, you have done a
lot of work to either purchase those offset properties or have in place mechanisms
like options so that you know that you are going to be able to purchase those
offsets. If your approval is conditioned to allow you further time to look for
offsets, it is usually in very low risk areas.
Ms Melanie Stutsel from the Minerals Council of Australia told the
committee that many companies 'actually work on identifying potential offset
locations even prior to referral of projects' under the EPBC Act. She further
advised that they would 'actually vary their referral if they did not consider
that they would be in an appropriate position to secure the offsets'.
At the same time, some submitters and witnesses expressed support for
the 'staging' of offsets. For example, QGC submitted that:
Securing agreements for land based offsets are lengthy
processes and the complications involved should be recognised in offsets
frameworks...delivering offsets at the operational stage rather than at the
application stage of a project is preferred, after impacts have been
quantified. This gives a more accurate indication of the residual significant
impact and therefore the required offset.
Similarly, the Minerals Council suggested that:
...long-term development plans should be supported by
alternative arrangements for delivery of offsets over a greater time scale.
Specifically, staging of offsets enables proponents to deliver offsets for
actual disturbances rather than estimated impacts at the EIS [Environmental
Impact Stage] stage.
However, as is discussed in Chapter 5, it was suggested that this
failure to fully identify and secure offsets prior to approval being granted
has led to the renegotiation of the conditions of approval in some cases.
A representative of the department confirmed that approvals are often
constructed to allow for a 'staged provision of offsets where that is an
appropriate thing from an ecological perspective':
What we usually do with the offset strategies that are
subsequent to the initial approval is require them as a condition precedent for
moving forward with the project—not always, but that is the general approach.
A representative of the department further explained that, depending on
the individual project, the conditions of approval normally contain 'a
requirement of when the proponent is required to develop and have approved an offset
strategy for their proposal. Quite often that is tied to the date of
commencement'. He also noted that:
...we do not have a view as to which piece of land is secured,
as long as the same environmental outcome occurs. That is why we write our
conditions that way, understanding that yes, there is that remaining
uncertainty with respect to what specific land will be secured.
Another representative further advised that:
The intention of the EPBC Act is, among other things, to
ensure that, where development is approved and will have an environmental
impact, that impact is acceptable to the community. It is not the intention of
the act to slow down the development of the economy or to impose costs on
business at inappropriate stages of the cycle... 
She concluded that:
...as long as the ecological impact is managed in a timely
manner, it is reasonable for a proponent to expect to progress with their
project while they are simultaneously doing their work on their offset strategy
or, indeed, providing their offsets.
The department acknowledged in its submission that its compliance audits
have identified issues with delays in securing offsets, and in particular in
'ensuring protective mechanisms are attached to the title of a property in a
There are a number of causes of these delays, including the
complexities and sensitivities of negotiating with land owners for the
protection and management of areas as offsets as well as the legal complexities
of registering a restrictive covenant on title.
The department identified this as an area where there is opportunity for
improvement, including 'for the Commonwealth to work with states and
territories to streamline covenanting arrangements to achieve better outcomes
for approval holders and the environment'.
Failure to find and/or secure
However, submitters and witnesses noted that in situations where
approval is given to proceed with a project without the offsets in place and
secured prior to the development commencing, there is a risk that offsets may
not be found, or be able to be secured, to meet the requirements in the
conditions of the approval.
Indeed, the committee received evidence of examples where conditions of
approval were being amended because, for example, the offsets that were
required by the approval have been unable to be secured.
Ms Higginson, Principal Solicitor with the Australian Network of
Environmental Defender's Offices (ANEDO) noted that, in this situation, 'there
are some provisions in the EPBC Act to remedy' the situation 'by either penalty
to the proponent, modification of the approval or ultimately revoking the
approval'. However, as she pointed out, there is not much point in revoking the
approval if a development has already occurred.
Mr Sydes of Environmental Justice Australia explained that the
difficulty in finding suitable offsets 'is a reflection of the fact that...you
are dealing with rare and threatened species'. He noted that the 'difficulty of
finding offsets puts enormous pressure on the offsetting system' which results
in calls to make the regime more flexible, and in turn 'undermines the
integrity of the scheme'. He argued that 'something has to give':
...where approval is granted conditional on finding an offset
some time later on, only to find later on, despite the best will in the world,
that offsets are just not available...the commitment has already been made and
the development of the project has already started. If you genuinely cannot
find an offset, then you will need to introduce some sort of flexibility into
the conditions, and that is often to the detriment of the objective behind
granting the offset in the first place...
However, Ms Doherty from the NSW Minerals Council argued that 'if your
approval is conditioned to allow you further time to look for offsets, it is
usually in very low risk areas'.
She suggested that, in the case of some of the examples put forward in this
context, the modifications were to allow more time 'in order to get their legal
mechanism in place, but that has not stopped them going ahead and implementing
their biodiversity offset strategy'.
Dr Anita Foerster and Professor Jan McDonald submitted that:
...where there is evidence from monitoring to suggest that
initial predictions about the adequacy of offset arrangement are in fact
inaccurate, proponents should be required to secure additional offsets.
Arrangements should be made for the establishment of environmental bonds or
other forms of financial guarantee to facilitate such an approach.
In response to questioning as to what happens if an offset approval
condition is unable to met due to the unavailability of a suitable offset, a
representative of the department advised that 'that circumstance is unlikely to
arise, due to the extensive analysis that is done before the project is
approved in the first place'.
Another key concern raised in evidence was the need for greater
transparency in relation to environmental offsets. The EPBC Act Offsets Policy
states that, in assessing the suitability of an offset, government
decision-making will be 'conducted in a consistent and transparent manner'.
The department submitted that:
Where a project proceeds to assessment and potentially
requires the provision of offsets, this information is published along with
other relevant assessment documentation for public comment. Public comments are
then addressed and summaries provided to decision makers to inform any approval
The department submitted that 'any requirements for delivery of offsets
are attached as conditions of approval' and that:
Certain types of conditions attached to approvals require the
consent of the proponent prior to being attached, and these can include offset
conditions. This requires the Department of the Environment to consult closely
with project proponents on prospective offset requirements.
However, submitters and witnesses argued that there could be improved
transparency, including public consultation and reporting in both the
development and implementation of offsets.
Many were concerned that the approach of requiring offsets to be developed
after approval (as discussed in the previous section) undermines the
transparency of the process. It was suggested that often this means that
offsets are negotiated between the department and proponent, with little
opportunity for public input or scrutiny.
Greenpeace, for example, complained about a lack of transparency of
negotiations between the department and the proponents in relation to offsets.
Mr Walters from Greenpeace noted that the current approach makes it difficult
to scrutinise the process due to a 'lack of transparency':
...the offsets are often developed after the approval is given
under the EPBC Act. So the approval document says that the offset plan must be
developed; it does not really allow us to fully scrutinise these projects. So
there may very well be cases where there has been some good practice, but we
would not be aware of it because the actual offsetting plan is developed—at
least the final version is developed—after the EPBC approval is given.
Ms Woods of the Lock the Gate Alliance similarly expressed concern that
that work is done and negotiations undertaken between bureaucrats and
proponents 'outside of the public's view':
...it is only scrutiny that protects the process—that gives the
process any transparency and rigour. If it is allowed to go on behind closed
doors, as it so often is, it seems to be the case that there is no check or
balance to ensure that the environment is being protected.
In the same vein, Friends of the Earth Australia agreed that, in terms
of the process used to develop and assess proposed offsets, 'basic tenets of
transparency and accountability aren't being met'. Friends of the Earth
described the practice of imposing a condition to develop an offsets strategy
or plan post-approval as 'black box politics'. They argued that this approach
means that the public are excluded from participating in this process. Mr Tager
from Friends of the Earth Australia explained that work that 'needs to be done
up-front', and made subject to public consultation, 'is now being moved to the
back end of the process where it is in-house behind closed doors'.
Mr Walters from Greenpeace noted that, in relation to one particular
project that is in the final stages of EPBC approval:
...the offsetting properties that are being proposed there, the
actual locations of those properties, are considered commercial information and
are being withheld. There is absolutely no scrutiny possible of the quality of
The committee notes that the department advised in its submission that,
in relation to the Curtis LNG Plant (discussed further in Appendix 5):
As the proposed offset is under commercial negotiation
involving private landholders and the Queensland Government, it is currently
classified as commercial-in-confidence at the request of the approval holders.
The department is advised that commercial negotiations are expected to be
completed by June 2014.
Some witnesses and submitters further complained that offset plans and
reports are not being made publicly available, even when they are finalised.
For example, the ACT Conservation Council lamented the lack of public access to
offsets management plans or reports required in relation to Commonwealth
approvals under the EPBC Act.
Indigenous groups also called for increased public consultation in
relation to the development of offsets. For example, the Indigenous Advisory
Committee called for improved engagement of Indigenous peoples in developing
The Gomeroi Traditional Custodians noted that the EPBC Act requires
consultation with Indigenous peoples, but submitted that they 'cannot see this
consultation in practice'.
Ms Pethybridge of the Indigenous Land Corporation agreed:
...there is not a whole lot of consultation with Indigenous
people in the design and development of offsets and the identification of
potential offsets projects...they should be participating in those steps in that
process, because there is a lot of value that they can add and a lot of
opportunities that can be realised by Indigenous people in that space.
The Department of Environment advised that it has been 'working
constructively' with the Indigenous Advisory Committee to improve consultation
with Indigenous peoples through environmental assessment processes, including
consultation about the delivery and appropriate use of offsets.
Other submissions also identified the difficulties in identifying areas
that have already been used as offsets, and discussed the need for a public
register of offsets. This is discussed further in the next chapter.
In contrast, other submitters noted that the publicly available EPBC Act
Offsets Policy and accompanying Offsets Assessment Guide have made the
development of offsets, and in particular the associated calculations and
assumptions, more transparent and predictable.
For example, the Environmental Decisions Group submitted that the EPBC Act Offsets
Policy 'is one of few that is accompanied by a transparent and logical
David Hogg agreed that the Offsets Assessment Guide and 'calculation
process is easy to use and is transparent, making it relatively easy for other
people to review the offset calculations and test their own variations'.
Witnesses from the Minerals Council of Australia concurred that the EPBC
Act Offsets Policy and guide have resulted in 'much clearer policy' and greater
transparency around the science being used for offset determinations.
Those witnesses also suggested that this had resulted in greater certainty, as
well as better coordination and less fragmentation of offsets.
A representative of the department told the committee that 'the
development of the EPBC Act environmental offsets policy and Offsets Assessment
Guide represents substantial progress in establishing robust policy settings
for regulating offsets in Australia'. The representative further advised that,
prior to the development of the EPBC Act Offsets Policy, the department had
received complaints 'related to the fact that expert judgement was being
exercised by assessment officers in a way that was not transparent and obvious
Methods for assessing and calculating offsets
The EPBC Act Offsets Policy states that, in assessing the suitability of
an offset, government decision-making will be 'informed by scientifically
robust information and incorporate the precautionary principle in the absence
of scientific certainty'.
Submitters and witnesses were generally supportive of the principle that robust
science should form the base of the development of offsets.
However, a number of concerns were expressed in this regard, including:
the independence of scientific advice and information
underpinning the assessment process;
issues with the methodology for identifying and developing
whether there is sufficient data and certainty in relation to the
science underpinning offsets.
Independence of advice and
In terms of the independence of the process for the assessment and
development of offsets, some submitters and witnesses noted that it is the
proponent who is responsible for the preparation of environmental assessment
documentation and the identification and development of offset arrangements.
Several submitters and witnesses suggested that this resulted in an
inherent conflict of interest for proponents in relation to the assessment of impacts
and the identification and development of offsets.
For example, Mr Philip Spark, of the Northern Inland Council for the
Environment, suggested that the offsets policy and planning process is 'open to
abuse and manipulation by developers, their consultants and government' and
that 'there is a major problem with conflicts of interest: consultants working
for developers mostly prioritise the client's project ahead of the
Greenpeace agreed that there is 'a conflict of interest inherent in the
assessment process' if proponents commission and pay for the scientific
This is because consultants are open to the risk that, should
they make a scientific finding that does not serve the best interests of their
client, then the potential for future work may be compromised.
Birdlife Australia concurred, noting that it is:
...aware of a number of examples where data has been
interpreted or omitted in a manner that may deliver more favourable outcomes
for the project proponent. That this process is unregulated and underpinned by
financial motivations of both proponent and consultant represents a conflict of
interest and must be addressed...
Ms Beverley Smiles, Central West Environment Council, was similarly
concern at the 'lack of an independent body of consultants that are not
influenced by proponents of major developments to provide the information on
which decisions are made'.
Some even described the assessment document as 'promotional material' for
On a similar note, the Environment Institute of Australia and New
Zealand (EIANZ) noted that proponents are required to prepare offsets
management plans and strategies but that 'proponents are not in the business of
conserving biodiversity values'. They submitted that, as a result, offsets are
'generally developed on an ad-hoc basis, often under extreme time pressures and
with little strategic planning'.
The need for a more strategic approach to offsetting is discussed later in this
However, Ms Stutsel from the Minerals Council of Australia disagreed with
the assertion that there is an inherent conflict of interest in the assessment
Just because someone pays the bill of an independent
scientist does not necessarily mean that they have influence over the science.
I am a scientist by training and I would hate to think that, if I were
undertaking science on behalf of a third party, the professional norms around
my expectations as a scientist would be in any way compromised in that process.
Mr Chris McCombe from the Minerals Council of Australia further told the
Ultimately, government agencies are responsible for vetting
and checking proposals, including the science behind it, as part of their
assessment and approval process.
Dr Martine Maron similarly observed that 'the role of the Department in
checking the information used to assess offsets is crucial'.
However, Mr Philip Spark of the Northern Inland Council for the
Environment queried whether departmental staff have 'the knowledge and
understanding of the landscape to question consultants' findings'.
For these reasons, several submitters and witnesses called for a more
independent assessment process. In particular, it was suggested that that
assessment documentation and information and calculations relating to offsets
should be independently verified.
Birdlife Australia suggested that the Commonwealth establish a 'tender process
by which environmental assessments are conducted in an impartial manner so as
project proponents are unable to influence the outcome or result'.
Other witnesses suggested that there needs to be a register or pool of
The Whitehaven Coal Maules Creek Project (as outlined in further detail
at Appendix 3) case study was put forward by some submitters and witnesses as
an example of the need for such independent verification.
Methods for assessing and
As noted in chapter 2, the EPBC Act Offsets Policy is accompanied by an
Offsets Assessment Guide, which is described as a 'decision support tool' used
to determine the suitability of offsets for listed threatened species and
ecological communities. The department's submission states that 'the offsets
policy and guide were developed to systemise the judgments that go into determining
Several submitters were very positive about the Offsets Assessment
Guide. In particular, as noted elsewhere in this report, it was suggested that
the guide has greatly improved transparency in relation to the methodology
At the same time, some submitters and witnesses identified some weaknesses
and limitations in the application of the Offsets Assessment Guide.
As Dr Su Wild‑River cautioned, tools such as the Offsets
Assessment Guide 'necessarily over‑simplify complex ecosystems':
An offset may look perfect on the spreadsheet, but still fall
short of acceptable in real life.
The Environmental Decisions Group were concerned that there are cases where
implausibly high assumptions have been made in the calculation of offsets. For
example, several submitters were critical of a development in the ACT where an
existing protected area was assumed to have a 70% likelihood of loss.
The Victorian National Parks Association (VNPA) discussed concerns in
relation to the offsets calculations in the recently completed strategic
assessment for Melbourne's Urban Growth Boundary.
They claimed that 'due to the use of simplified assessment methodologies, the
offsets in the case of grasslands, are not the same ecologically as those used
as offset' nor are they of the same quality. The VNPA further expressed concern
that there are often 'various, often unsupported, criteria or weightings used
in calculation of offsets'.
NELA submitted that:
The assessment methodologies and tools currently used under
Commonwealth, state, and territory offset schemes assume that it is possible to
objectively measure biodiversity values, effectively compare losses and gains,
and demonstrate the "ecological equivalence" of offset sites and lost
values. They attempt to make offset calculations as objective and
scientifically defensible as possible, but in doing so they risk underplaying
the ultimately subjective value judgments involved.
At the same time, Mr David Hogg submitted that:
The assessment of biodiversity offsets should also include a
subjective process based on sound scientific knowledge of the relevant species
or ecological community in its full context, rather than just 'number‑crunching'.
Mr Philip Stark of the Northern Inland Council for the Environment told
the committee that the offsets calculator is 'particularly open to manipulation
and abuse'. He claimed that, in the Maules Creek development (discussed further
in Appendix 3):
The existing threats to the offset habitat were overstated to
achieve greater gain through management. The confidence of achieving the
conservation gain was unrealistically high. The risk of failure was
underestimated. There was no application of the precautionary principle,
particularly in relation to compensating for loss of known habitat for
endangered species and the critically endangered ecological community. The
starting value was often underestimated to increase the conservation gain.
However, Ms Stutsel from the Minerals Council rejected suggestions that
environmental offsets are a 'magic pudding' calculation rather than based on
sound science and expert opinion. She suggested that such comments 'are
dismissive of the significant work of experts and leading institutions in the
development of the Commonwealth's offsets calculator'.
The need for independent verification of offsets calculations, as well
as greater transparency, again arose in this context. For example, Dr Philip
Gibbons submitted that there needs to be:
...greater instruction and oversight on the figures that are
used in the Offset Assessment Guide. Assessments under this Guide should be
made available to the public for all decisions to improve transparency and
ultimately ensure that a greater level of rigour is applied to assessments.
Mr David Hogg similarly suggested that the use of the Offsets Assessment
Guide be subject to peer review, particularly, for example, in relation to the
estimates of the probability of extinction for each relevant species or
A representative of the department explained that the Offsets Assessment
Guide 'uses a balance sheet approach to quantify the benefit that an offset may
provide' and was 'developed in close collaboration with academic experts'. She
further told the committee that the guide:
...provides a robust and transparent means to calculate gains
and losses from offsets and development activities. The guide is available,
with relevant instructional material, for use by the public and proponents in
estimating any potential offset requirements.
The department's submission further states that:
Since its release the guide has been highlighted as one of
the only offset metrics globally that explicitly accounts for 'additionality',
uncertainty, and time lags in calculating an offset requirement.
The science behind offsetting
Several submissions and witnesses were concerned about the uncertainties
involved in the science of environmental offsetting. For example, Greenpeace
described the related science of restoration ecology as a relatively new and
evolving area of research and practice.
Mr Adam Walters of Greenpeace told the committee that:
... offsetting and restorative ecology generally is quite an
infant science, yet it is being used in a very significant way to allow very
large developments that will have a very significant impact on matters of
national environmental significance...the state of the science does not really
seem to be up to the task of providing a certain mitigation of that damage.
Greenpeace concluded that, 'given the current state of the science', it
...at best misleading, and at worst, incorrect to claim that
the BOP [EPBC Act Offsets Policy] can deliver a 'robust' environmental outcome.
In general, the approval decisions using offsets is based on a science that is
either non-existent or insufficient to the task.
However, a representative of the department told the committee that the
EPBC Act Offsets Policy is 'based on the best available scientific literature'.
Offsets in the marine environment
A particular issue raised in this context was offsetting in the marine
environment, and whether it is appropriate for the EPBC Act Offsets Policy to
apply to both land-based and marine ecosystems.
For example, Dr Megan Saunders and Dr Justine Bell submitted that it needs
to be recognised that 'marine ecosystems are fundamentally different to those
on land'. They recommended that:
...offsets not be used widely in marine habitats until the
science underpinning restoration in these important ecosystems is developed
further, particularly with regard to seagrass ecosystems.
In particular, Dr Justine Bell told the committee that:
...techniques for rehabilitating marine environments are still
being developed. There is significant uncertainty as to whether offset outcomes
and requirements can be achieved.
The Environmental Decisions Group similarly submitted that there should be
a separate offsets policy approach to adequately protect marine ecosystems for
a number of reasons, including that:
marine environments are subject to larger scales of ecological
connectivity, are highly prone to environmental disturbance;
marine environmental restoration techniques, such as those used
for seagrass habitats, are in early developmental stages, with highly variable
success rates; and
the influence of diffuse impacts from activities occurring on
land, which are currently not accounted for in offset accounting.
NELA recommended that the EPBC Act Offsets Policy be revised to include
'separate requirements for marine habitats'.
NELA further noted the Abbot Point project (outlined in further detail at
Appendix 6) as an example of issues with offsets in the marine environment. In
that case, the offsets plan is required to address the direct loss of seagrass
and indirect losses as the result of the dredge plume.
The Minerals Council of Australia also acknowledged that 'there are
important distinctions to be drawn between land-based offsetting and marine
offsets' and noted the difficulty in the context of the marine environment of
'defining and quantifying the impacts at an ecosystem level'.
The Australian Institute of Marine Science (AIMS) similarly highlighted
problems in developing offsets in the marine environment, and suggested that,
in the case of marine ecosystems, 'greater consideration needs to be given to
the value that targeted, independent research programs can provide as an
Such 'indirect offsets' or 'compensatory measures' were discussed in the
Uncertainty and availability of
Others pointed to a lack of data and information underpinning offsets,
such as vegetation mapping or species for which there is little data available.
For example, NELA submitted that:
Vegetation mapping is typically used as the basis for
calculating the standard and quantum of offset required, yet there is
considerable debate about accuracy, scale and quality of vegetation maps. Inadequate
mapping means that areas identified for offsets may not in fact meet the
attributes or condition of the area being destroyed.
In this context, Mr Tager of Friends of the Earth illustrated this point
by pointing a development where the conditions of approval required an offsets
strategy which included funding for research relating to the snubfin dolphin.
He noted that the snubfin dolphin is a relatively newly-discovered species
about which there is little data. He queried 'how can you have an offset when
you know so little about the species that you are trying to protect in that
The committee also heard evidence that the principles that underpin the
use of offsets should also 'factor in climate change...and the ecological
viability or conservation importance of the offset in changing environmental
As Dr Yung En Chee concluded:
The concept of offsets is simple. But their function is to
address complex, imperfectly understood ecological characteristics and
processes to improve or maintain the viability of impacted protected matters.
The difficulty of this task is compounded when the protected matters in
question are poorly known and/or subject to a range of dynamic threatening
processes. This makes offsets complex to design, assess, and successfully
deliver in practice, particularly given the attendant risks and uncertainties.
Other submitters pointed to the Whitehaven Coal Maules Creek Project (as
outlined in further detail at Appendix 3) as an example of the problems of insufficient
data, and in particular accurate vegetation mapping, relating to suitable
Dr Foerster and Professor McDonald also commented that offsets schemes
are based on a number of assumptions, which are 'not borne out in the published
research on offsets'. They emphasised the need for a precautionary approach was
emphasised in this context. They submitted that:
...there is growing evidence that the quality of existing
biodiversity at project sites is not well understood, that restoration
activities often achieve limited success, and a wide range of environmental and
institutional uncertainties can affect the attainment of the 'no net loss'
objective... In this context, a precautionary approach to the use of offsets is
However, a representative of the department advised that the EPBC Act
Offsets Assessment Guide deals with uncertainty:
...there is a calculation specifically derived from the offsets
policy into the offsets calculator, which looks at the likelihood of the success
of the proposed offsets for being effective with respect to the desired
environmental outcomes. So explicitly that is built into the calculator in
terms of determining the likely value of the proposed offsets.
Strategic and consistent approaches to offsets
Another key issue raised during the committee's inquiry was the need for
more strategic and consistent approaches to environmental offsetting. In
particular, a number of submitters recommended that offsets should be
considered in the broader context of strategic planning.
Dr Gibbons recommended 'a more holistic strategy' to the use of offsets,
advising that 'there are bigger things happening that are affecting the loss of
It is incorrect to blame offsets for ongoing loss in matters
of national environmental significance. It is like blaming the fuel gauge when
the tank is empty.
The EIANZ submitted that 'project-specific offsets are generally
developed on an ad-hoc basis, often under extreme time pressures and with
little strategic planning'. The EIANZ therefore called for 'government to
provide greater strategic planning for the identification and delivery of
offsets that provides proponents with greater certainty of their required
Several submitters and witnesses, such as the Wentworth Group, commented
that there is a need to consider the cumulative impacts of individual projects:
Most offsets schemes operate at an individual project scale.
The major flaw of this system is that it does not effectively manage
biodiversity, nor does it effectively manage the cumulative impact of multiple
developments. Individual developments, when considered in isolation, may have a
minor impact on the environment, but when combined, their cumulative impact can
result in long term damage to Australia's land, water and marine ecosystems.
Therefore, by far the most effective way to promote development and deliver
better environmental outcomes is to invest in long‑term, landscape-scale
planning to determine where, and under what conditions, development can safely
The department submitted that it 'considers whether offsetting is
possible and appropriate on a case-by-case basis'.
However, the Wilderness Society submitted
that this 'case-by-case approach':
...reinforces an ineffective piecemeal approach to the
conservation of important national environmental values and community assets.
Mr David Hogg similarly observed that 'it appears that most offsets are
based on a piecemeal approach and lack a strategic context'.
The EPBC Act Offsets Policy states that a registration system for
offsets, will 'allow strategic planning, and streamline processes with state
and territory requirements and schemes'.
However, as discussed in Chapter 5, the department advised that this register
has not yet been implemented.
Consistency in offsetting regimes
Another issue raised was the variability across state, territory and
local government regimes in terms of offsets policies, and the need for greater
consistency across all Australian jurisdictions.
For example, Mr Martin Fallding of Lake Macquarie City Council told the
committee that 'biodiversity offsetting arrangements are different and
inconsistent between the three levels of government'.
As such, he identified the need for a consistent, legislated set of offset
principles to apply at Commonwealth, state and local government level.
The NSW Minerals Council told the committee that its members operate
under two different systems for offsetting under the EPBC Act and also under
the NSW Offsets Principles and that 'frequently different offsets are required
to achieve the outcomes required by the two different jurisdictions'.
The ACT Conservation Council also expressed concern about the lack of
clarity as to responsibility and coordination between the ACT government and
the Commonwealth government, particularly in relation to compliance with
offsets required under the EPBC Act.
There was therefore some discussion during the committee's inquiry about
the government's proposal for a 'one stop shop' for environmental approvals in
Australia. As outlined in Chapter 2, under the proposal the Commonwealth will
accredit state and territory planning processes under the EPBC Act. The department
submitted that, under the 'one stop shop' proposal, states and territories
'will be required to meet the published Standards for Accreditation of
Environmental Approvals under the EPBC Act'. According to the department, these
...specify that any offsets delivered through an accredited
process must achieve long-term environmental outcomes for matters protected
under the EPBC Act and be consistent with either the EPBC Act Environmental
Offsets Policy, or another policy accredited by the Minister as achieving the
objects of the EPBC Act to an equivalent or better level.
Other submitters expressed support for the 'one stop shop' proposal. For
example, the National Farmers' Federation submitted that it 'is an opportunity
to further align the offset policies' of the states and the Commonwealth and
that 'such alignment will avoid the current confusion of separate offset
requirements by the different jurisdictions'.
For example, the Minerals Council of Australia called for 'greater
alignment and accreditation of offsets processes between the Commonwealth and
the State/Territory jurisdictions'.
The Chamber of Minerals and Energy Western Australia agreed, and suggested that
'any offsets requirements imposed under both State and Commonwealth legislation
should be complementary and should not impose additional costs on industry'.
NELA suggested that the 'one stop shop' proposal provides an opportunity
to address the different approaches to offsets across the Commonwealth and
states and territories. As with other submitters, NELA supported the
development of a national standard to 'facilitate alignment' between the
different schemes. NELA noted that the EPBC Act Offsets Policy is a 'benchmark'
for discussions between the Commonwealth, states and territories. However, NELA
suggested a more comprehensive national standard that 'affords high levels of
protection for Australia's biodiversity', and that the Commonwealth take 'a
leadership role' in coordinating the development of this standard.
However, other submitters and witnesses were very concerned about the 'one
stop shop' proposal.
For example, ANEDO suggested that standards might be lowered as a result of the
proposal, and submitted that the 'Australian Government must retain a
leadership and approval role to protect and enhance matters of national
environmental significance'. They further submitted that:
Now is not the time to rush through State policies that are
based on reducing approval timeframes rather than robust science.
The Wentworth Group were concerned that state environmental planning
laws are not able to 'satisfy national standards' and submitted that:
...it is irresponsible for the Commonwealth government to hand
over national EPBC assessment and approval powers to state governments without
a transparent science-based national standard.
Other witnesses suggested that the 'one stop shop' proposal could
actually make matters more complicated. For example, Mr Sydes of Environmental
Justice Australia described the 'one stop shop' as 'effectively eight or nine
one stop shops':
...if you think about it, we are displacing the current
Commonwealth leadership role to state and territory governments all around the
country. We really need to think about whether or not that fragmented approach
is the best way to go about protecting biodiversity, because I think it is not.
Mr Martin Fallding of Lake Macquarie City Council suggested that the
'one stop shop' proposal was a good idea 'in principle' but cautioned that 'it
is probably going to make things more complicated' and added that:
...the fact that there are different legislative frameworks
which have different responsibilities means that it is very difficult to
achieve that without significant legislative reform. The fact is that,
particularly at the state and Commonwealth level, there are conflicts of
interest between those two levels of government, and between the legislative
requirements that they are facing, that mean that it is not actually going to
Mr Fallding also noted that 'local government is a significant player in
offsets because of its on-the-ground relationship to land and the capacity to
manage land'. He was concerned that local councils 'are more likely to be
excluded' from the offsetting process under the 'one stop shop' proposal, which
he described as a 'retrograde step'.
Ms Rachel Walmsley from ANEDO described the proposed one stop shop as 'a
very piecemeal approach', confusing and unclear. She gave the example of the
disparity in the approach to the use of indirect offsets across different
jurisdictions, and queried, for example, how the Commonwealth could accredit
state systems that do not meet the national policy of a 10 per cent cap on the
use of indirect offsets.
In this context, some submitters and witnesses identified concerns about
proposed reforms to offsetting arrangements in Queensland and New South Wales.
For example, ANEDO were concerned that Queensland and New South Wales are
'lowering offset standards by relaxing the fundamental principles' and placing
greater emphasis on the use of indirect offsets.
Ms Walmsley of ANEDO suggested that, given the imminent accreditation of state
standards under the one stop shop policy, 'these changes are of serious
Mr Sydes of Environmental Justice Australia told the committee that any concerns
about problems of offsets under the EPBC Act' can be multiplied tenfold when it
comes to state based offsetting regimes'. He further advised that:
In Queensland, in New South Wales and in Victoria there are,
under development or in fact already being implemented, offset regimes that are
even further from the really important principles that the ecologists in
particular say are essential to a credible offsetting regime. And yet it is
these very state based regimes that the government is currently looking to
accredit as approvals regimes under its one stop shop policy.
In contrast, the Minerals Council of Australia described the new
Queensland legislation as a 'significant advance in ensuring offsetting
conditions are not duplicated between multiple levels of government'.
Several submitters and witnesses expressed support for a clear national
standard for offsets, and noted the recent Productivity Commission
recommendations, as outlined in Chapter 2. ANEDO suggested that, consistent
with the recent recommendations of the Productivity Commission, a comprehensive
independent review of offsets be conducted, with a view to developing a
rigorous, best practice national standard. ANEDO suggested that state standards
and relevant legislation should be amended to meet the national standard, and
that accreditation of state processes should not occur until this happens.
WWF-Australia also expressed support for the Productivity Commission's
recommendations, and agreed that a nationally consistent offsets framework is
needed which will 'not only ensure better outcomes for the environment but a
more streamlined and consistent process'.
In response to questions as to the status of the EPBC Act Offsets Policy
under the one stop shop proposal, a representative of the department explained
that it will remain the Commonwealth's offset policy and that states and
territories 'will be expected to deliver equivalent or better outcomes' in
relation to offsets. However, she advised that if the states introduced
equivalent legislation 'then there would not be a need for a Commonwealth
offsets policy'. However, the representative also explained that 'the
Commonwealth would continue to undertake some assessments even after the one
stop shop' in relation to actions on Commonwealth land and that the 'current
policy would be the baseline for that'.
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