Chapter 3Environment Protection Australia
3.1This chapter outlines the key issues raised by inquiry participants about the establishment and operation of Environment Protection Australia (EPA) by the Nature Positive (Environment Protection Australia) Bill 2024 (the EPA bill), and the related amendments in the Nature Positive (Environment Law Amendments and Transitional Provisions) Bill 2024 (the Amendment bill).
3.2It provides contextual information relevant to the establishment of the EPA, including the related findings of the independent review of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), led by Professor Graeme Samuel (the Samuel Review) and the Australian Government's response as outlined in the Nature Positive Plan.
3.3Chapter 4 examines feedback received about the Nature Positive (Environment Information Australia) Bill 2024 (the EIA bill) while Chapter 5 discusses the key provisions of the Amendment bill and other key issues raised during the inquiry not addressed in previous chapters.
The establishment of Environment Protection Australia
3.4As set out in Chapter 2, the EPA bill and Amendment bill contain various provisions that would establish a new statutory entity known as EPA. The EPA would be responsible for administering Australia's national environment laws including responsibilities relating to the EPBC Act and other Commonwealth environmental laws.
3.5In outlining the proposed establishment of the EPA, the Minister for the Environment and Water (the Minister), the Hon Tanya Plibersek MP, stated:
Australia will get its first national Environmental Protection Agency (EPA), with strong new powers and penalties to better enforce federal laws. The EPA chief will be an independent statutory appointment—similar to the Australian Federal Police Commissioner—to make sure no government can interfere with the new agency's important enforcement work.
The EPA will be able to issue Environment Protection Orders—or 'stop-work' orders—to anyone breaking the law. It will also be able to audit businesses to ensure they are compliant with environment approval conditions.
Penalties will be increased too, bringing maximum fines into line with punishments for serious financial offences such as insider trading and market manipulation…Importantly, the new EPA will provide better guidance and education to make sure businesses are clear about the rules, so they can do the right thing.
The findings of the Samuel Review
3.6In assessing the effectiveness of decision-making and compliance and enforcement functions under the EPBC Act, the Samuel Review concluded that that 'there has been limited activity to enforce the EPBC Act over the 20-year period it has been in effect and a lack of transparency about what has been done'.
3.7Among its recommendations, the Samuel Review advocated for a National Environmental Standard for compliance and enforcement with the standard requiring compliance and enforcement functions to be delivered in a way that is 'independent of actual or implied political interference' and is transparent and accountable, including public registers of action.
3.8In addition, the review recommended the immediate establishment of a new independent Office of Compliance and Enforcement within the former Department of Agriculture, Water and the Environment.
3.9As part of the response to the findings of the Samuel Review, the Australian Government committed to establishing an independent national EPA to restore trust and integrity. The agency would undertake ‘regulatory and implementation’ functions under the EPBC Act, and other relevant Commonwealth laws; undertake assessments and make decisions about development proposals; issue permits and licenses and undertake compliance and enforcement activities.
3.10The following section outlines the different views of submitters about the proposed EPA's independence and governance arrangements.
The independence of the EPA
Governance arrangements including appointment of the CEO
3.11As discussed in Chapter 2, the EPA bill proposes to establish the role of the Chief Executive Officer (CEO) of the EPA, appointed by the Governor-General for a fixed term. Such appointments would usually be made on the recommendation of the Minister or the government of the day.
3.12The Department of Climate Change, Energy, the Environment and Water (DCCEEW) outlined the establishment of the EPA, including proposed measures that would support its independence while remaining accountable to the government:
The EPA is being established in law as a Commonwealth entity. It will be subject to the PGPA Act [Public Governance, Performance and Accountability Act 2013], the Auditor-General Act and all of the standard areas of whole-of-government compliance that are required for an entity like that. The CEO will be appointed as a CEO by the minister. The minister will be able to, and will, issue a statement of expectations in relation to the operation of the EPA. The CEO will respond with a statement of intent. Both of those documents will be made public when they are provided. That will broadly give the minister an opportunity to set out her expectations around how the EPA will function and operate.
3.13As noted in Chapter 2, the Minister would be able to issue the EPA with a public Statement of Expectations which may guide but not direct the agency.
3.14There were various views on the proposed degree of independence of the EPA. On one hand, submissions from various environmental and conservation groups, scientific bodies and legal experts emphasised the need for a robust and independent governance structure for the EPA. These organisations recommended that the CEO be appointed by, and report to, an independent statutory qualified governance board to ensure the EPA's independence and integrity.
3.15The Places You Love Alliance, representing over 70environmental organisations nationally, contended that the proposed governance model of a single CEO appointed on recommendation of the Minister with no accountability structure 'raises serious concerns regarding integrity and leaves the EPA vulnerable to influence from government and proponents in relation to the exercise of its functions'.
3.16WWF-Australia argued that the absence of a board structure is inconsistent with the approach of every other major EPA within Australia and 'considered a backward step'. The Labor Environment Action Network also outlined its support for the EPA to have an independent governance board, consistent with international best practice.
3.17The Law Council of Australia submitted that the proposed 'CEO without a Board' model is problematic for a range of reasons. These include the risks of concentrating complex decision-making under Australian environmental laws within a single person; potential susceptibility to political or industry influence; and leaving the CEO's powers 'effectively unconstrained and without oversight'.
3.18The Biodiversity Council, while supportive of the EPA as an institution, argued against a ‘ministerially appointed’ CEO:
The EPA bill and the environmental law amendment bill in front of us do not create the necessary shift away from discretionary decision-making bythe minister towards standard based decision-making by an independent regulator. This requires both the establishment of an EPA as a full statutory authority with an appropriately qualified independent board and board-appointed CEO, not a ministerially appointed CEO, that makes decisions based on environmental standards.
3.19Some submitters identified EPAs in other jurisdictions that the Commonwealth EPA could be modelled on. The Australian Conservation Foundation observed that the Victorian Environmental Protection Agency implemented a board structure following a global review of best practice:
It [the Victorian EPA] just went through a legislative reform a few years ago. They did a global review of best practice and put in a board… It was the second EPA formed in the world, actually, so it has been around for a very long time. There are good models we can look at, and there are really bad models, we absolutely agree. Fundamentally for the bad models, you don't have separation of responsibilities and decision-making between the politics and the decision-makers. That statutory role needs to be important. There need to be very clear objectives and responsibilities of the EPA in the act... That is very important, and we are saying that is missing in this bill at this point in time. And, of course, you have to have the right person held to account to implement those objects.
3.20In a similar vein, the Wentworth Group of Concerned Scientists argued that the enabling legislation for the EPA could draw on lessons from other jurisdictions, including by modelling the national EPA on the best practice elements drawn from legislation establishing existing state environmental regulators such as the NSW, Victorian and South Australian EPAs, and the NSW National Resource Access Regulator.
3.21Several submitters proposed possible changes to the EPA bill and EPA‑related amendments in the Amendment bill to strengthen the EPA's independence and accountability. These include:
calls for the EPA to be governed by a statutory, independent skills-based board. The board could advise the Minister on the appointment of the CEO, determine the policies and long-term strategy of the EPA, and ensure the CEO undertakes its functions consistently with the EPA's objectives, duties and purpose;
greater transparency of the delegation of powers and functions under the EPBC Act to the EPA by the Minister including by publication of the instrument of delegation;
defining and limiting in the legislation the circumstances in which the Minister can “call in” or take over decision making functions;
limiting the ability of the Minister to issue a Statement of Expectations to the EPA to be consistent with the legislative purpose of the Acts for which EPA will have responsibility;
including high-level principles to guide the exercise of the EPA's and CEO's functions, similar to the approach used by other regulatory bodies such as the Climate Change Authority.
3.22WWF-Australia, along with several other submitters, recommended additional oversight and accountability mechanisms including establishing a joint statutory parliamentary committee to oversee the EPA. That committee would have oversight of the CEO's performance, the ability to recommend to the Governor-General and Minister suitable appointees as Chief or Deputy CEO and provide advice about the allocation of the EPA's budget for monitoring, compliance, enforcement and assurance functions.
3.23In addition, several submitters recommended that the EPA Bill should set out clear objectives for the EPA in the exercise of its functions, powers and duties including various duties to ‘promote environmental justice’, ‘ensure substantive public participation in environmental decision-making’, and ‘take action to prevent and mitigate greenhouse gas pollution and take all actions necessary to reduce the impacts of climate change’.
The views of business and industry groups
3.24In contrast to these views, various industry groups, think tanks and representatives of the mining sector, argued for greater constraints on the CEO and EPA's independence, including greater limitations and Ministerial constraints on its role. For example, the Institute of Public Affairs expressed concern about regulatory powers being transferred from an elected Minister to an 'unelected bureaucrat':
Ministers are better positioned than unelected and unaccountable bureaucrats to make informeddecisions on environmental policies. This is because the minister must factor in the views andpriorities of other ministers in the elected government and, in theory, should be considering theother important elements of regulatory decisions, such as the economic value that could be lostdue to approval decisions made or regulatory actions taken.
3.25This view was supported by the Business Council of Australia, which proposed that an independent board would reduce the accountability of the EPA by diffusing responsibility and removing the EPA from the scrutiny of the electorate.
3.26The Business Council of Australia as well as organisations such as the Australian Aluminium Council, representing Australia's bauxite mining and aluminium processing industries, argued that the Minister should be the default decision maker, and is best placed to consider and balance environmental, social and economic factors.
3.27The Business Council of Australia outlined this balancing act as:
You take environmental considerations, social considerations and economic considerations, and in some instances the environmental considerations should prevail; in other instances, the economic considerations should prevail. But ideally you want to get the balance right with all of them. What we're concerned about with this legislation is that, if you place the decision-making power in the hands of a body that cannot be directed by the minister and that body has an environmental remit and priority first and foremost, then you won't get that appropriate balance. That's all we're all after. We want a balanced consideration; we don't want any particular interest to be prioritised.
3.28Other submitters including Fortescue also expressed strong concerns that the EPA does not face adequate accountability for the length of their five-year tenure.
3.29In line with these views, these organisations proposed various changes to the EPA bill including:
providing the Australian Government or Minister the power to remove the CEO for failure to meet statutory requirements, failure to consider the Minister's Statement of Expectations or maladministration;
limiting the EPA's role to make recommendations to the Minister, with the Minister the final decision-maker on whether any project proceeds;
providing additional safeguards to ensure that the EPA operates and exercises its powers consistent with Government's policies and priorities;
subjecting the EPA to a regular review by the Australian National Audit Office, with these reviews informing any re-appointment decisions; and
limiting the CEO's terms of appointment to three years with a maximum of two re-appointments.
Ministerial delegation and the functions of the EPA
3.30The Amendment bill provides the CEO with functions:
directly through amendments to eight environmental laws and some provisions of the EPBC Act; and
indirectly through the use of a new delegation mechanism in the EPBC Act.
3.31The proposed delegation mechanism in the EPBC Act would allow the Minister (or Secretary) to delegate any or all of their functions and powers to the CEO and staff of the EPA. Currently, the EPBC Act provides the Minister, the Secretary and the Director of National Parks with the power to delegate any and all of their functions and powers to specified persons or entities.
3.32DCCEEW officials explained:
The process at the moment is that the minister makes a general delegation…to the department—but in future it would be to the EPA—under the EPBC Act that provides for the department to undertake the decision-making in relation to those areas that are delegated. What you're talking about specifically goes to, basically, parts 7, 8, 9 and 10 of the EPBC Act, which are the assessment and approvals functions.
3.33With respect to the current arrangements, DCCEEW outlined that in 2023-24, departmental officials made 98.6 per cent of decisions in relation to referrals, approvals and variations to conditions under the EPBC Act with the Minister making the remaining 1.4per cent of these decisions. This was a broadly consistent trend over the five year period to 2023-24.
3.34DCCEEW provided a further breakdown for each type of decision, over the fiveyear period to 2023-24:
Ministerial decisions in variations to conditions ranged from 1.9 per cent (in 2022-23) to 2.1 per cent (in 2023-24);
Ministerial decisions in referrals ranged from no decisions made by the Minister (2019-20, 2021-22 and 2022-23) to 1.7 per cent (in 2020-21).
Ministerial decisions for approvals fluctuated, ranging between 2 per cent (in 2023-24) to 15.3 per cent (in 2020-21).
3.35DCCEEW further explained that the current Ministerial delegation power will remain in place except the Minister will be able to delegate those decision‑making powers to the EPA CEO. Under the Stage 3 reforms, the power to make assessment and approvals would move fully to the CEO of the EPA, with the Minister retaining its ‘call-in power’.
3.36DCCEEW outlined:
Assessment and approval powers will not be directly vested in the CEO of the EPA [under the Stage 2 reforms]. In the first instance, given they operate as they are under the EPBC Act, those powers will remain powers of the minister, but the minister will be able to delegate those powers to the CEO of the EPA to operate, in the same way that the minister at the moment delegates those functions to the relevant areas of the department…
…there will be a call-in [Ministerial call in powers], but the default changes from the minister to the EPA in stage 3.
3.37The Law Council of Australia outlined that the delegation, as currently drafted, permits the CEO of the EPA to operate wholly independently of the Minister and not subject to any Ministerial direction. This is a departure from the current Ministerial delegation to DCCEEW where the relevant officers exercising the delegated powers operate under the general direction of the Minister. Accordingly, the Law Council recommended that these instruments of delegation be made publicly available and a ‘notifiable instrument’ for the purposes of accountability and clarity in decision-making.
3.38Industry and business groups such as the Urban Development Institute of Australia, Chamber of Commerce and Industry Western Australia, and the Business Council of Australia argued that the delegation powers should be retained in its current form or mirror the current Act.
3.39In contrast to these views, submitters such as the Australian Conservation Foundation, the Environmental Defenders Office and the Places You Love Alliance recommended greater decision-making abilities and autonomy for the EPA. This includes ensuring that the EPA is a ‘fully independent decision maker rather than a decision maker under delegation’. Similar to the Law Council, these groups recommended that the instrument of delegation made by the Minister conferring functions on the EPA should be made publicly available.
Appointment of an Advisory Group
3.40The EPA Bill provides that the EPA CEO may establish an Advisory Group to provide advice or assistance in the performance of the CEO's functions, although the CEO would not be bound to follow that advice and would have discretion as to its publication.
3.41Various views were expressed about the usefulness of the Advisory Group as set out in the EPA bill. For example, the Law Council of Australia described the scope of the Advisory Group’s functions as ‘vague’ and ‘left entirely to the CEO to decide what the group will advise on’. The Australian Conservation Foundation noted that while it may serve as a useful advisory body to the CEO, it is not a substitute for the governance or the increased transparency that a board or oversight by a Joint Parliamentary Committee would provide.
3.42Several submitters emphasised the need for a transparent appointment process, including a skills-based merit system for members, clear terms of reference and conflict of interest requirements. In addition, where advice is provided to the EPA, these submitters recommended that this should be made public (with limited exceptions), with the CEO required to state when it has received advice and whether it has deviated from that advice in any decisions.
3.43The National Farmers’ Federation, while acknowledging that the establishment of an Advisory Group is a sound concept, questioned its practical benefit noting ‘it is difficult to envisage the necessity of this Group other than to create the perception that the CEO is independent, and environmental decision-making is the product of independent expert advice.’
Scope of the EPA's remit
3.44As set out in Chapter 2, the EPA would undertake a range of regulatory functions, including, but not limited to:
issuing permits and licences;
undertaking compliance and enforcement activities; and
undertaking delegated activities which may include assessments and decision-making about development proposals and approval conditions.
3.45Organisations such as the Australian Climate and Biodiversity Foundation noted the narrowing in the scope and powers of the proposed EPA, when compared to the roles and responsibilities proposed through DCCEEW's consultation processes. It outlined that the focus of these bills appears 'aimed at improving compliance and enforcement rather than independent and fact-based decision making' for environmental approvals.
3.46The Australian Conservation Foundation recommended that the EPA be the decision-maker in relation to assessments and approvals under the new national nature laws to be developed as part of the Government’s Stage 3 reforms.
3.47In line with their views about the appropriate delegation of decision-making authority, other submitters such as the Chamber of Minerals and Energy WA and Fortescue recommended that the EPA's remit be limited to compliance and enforcement with environmental approval decision-making functions remaining a ministerial prerogative.
Other issues raised about the EPA
3.48Other suggestions were put forward by submitters in relation to the EPA’s functions as proposed in the EPA bill and related provisions in the Amendment bill. These include:
requiring the EPA to respond to requests for it to issue an Environment Protection Order (EPO) when provided with evidence of a breach of the EPBC Act or of approval conditions;
embedding community consultation requirements including requiring the EPA to develop and implement a community consultation charter with consultation timeframes; and
requiring the EPA to respond to requests from the community to require the referral of an action for assessment within a reasonable timeframe.
3.49For example, The Wilderness Society advocated for community consultation requirements for the EPA to allow ‘informed’ third parties to refer projects for the EPA’s assessment. This would ensure the EPA would not ‘simply rubberstamp proponent-run community consultation’.
…yes, we believe the EPA needs to require that community consultation is done, and it must be responsible for that. In that context we also need to see that informed members of the public are able to request referrals; that's what we're getting at in that part of our submission. That means that informed members of the public—so not just anybody—and third parties have the ability to request the EPA, as assessor and decision-maker, to request a proponent refer a project for assessment. Particularly where nature destruction is impending or already on foot, we believe this will strengthen the independence and integrity of the EPA.
3.50The inquiry also received evidence about the need to ensure that the EPA is adequately resourced through additional funding to properly administer the reformed environmental laws. The Smart Energy Council outlined:
We would welcome the EPA being appropriately resourced, and, obviously, we've certainly pushed previously for the Department of Climate Change, Energy, the Environment and Water to have its resources increased. We were really pleased at last year's federal budget that there was a really substantial increase in funding for DCCEEW, so we're keen to see that happen again probably through MYEFO [Mid-Year Economic and Fiscal Outlook]. We think additional resources for the department and for the EPA would be something that we would very strongly welcome.
Committee view
3.51The committee heard broad support for the establishment of an independent national environment protection agency, Environment Protection Australia (EPA), with strengthened compliance and enforcement powers to administer Australia’s national environmental law.
3.52The committee notes the varying perspectives on the proposed EPA’s independence and governance arrangements, as well as its scope and remit in environmental decision-making.
3.53The committee acknowledges the extent to which DCCEEW has consulted with stakeholders on the proposed scope and functions of the EPA and the need to strike the right balance between the EPA’s independence and broader Parliamentary accountability.