Planning Alert: Environmental offset conditions introduced for environmental authorities - 17 Mar 2011

The Environmental Protection and Other Acts Amendment Bill 2009 reinforces the environmental offset conditioning powers vested in assessment managers and concurrence agencies. Entities applying for an environmental authority for mining, petroleum and greenhouse gas storage activities, or for development approval, need to be aware that State agencies and councils can impose an environmental offset condition as part of that approval.

While the Queensland Government's Environmental Offsets Policy has existed since 1 July 2008, the Bill makes it clear beyond doubt that environmental offset conditions may be imposed.

The Bill is likely to be finalised by the Queensland Parliament in the next few weeks. Here, partner James Ireland and solicitors Damian Roe and Gemma Ayriss outline the main changes the Bill introduces, and explain the concept of 'environmental offset conditions'.

Background to the Environmental Protection and Other Acts Amendment Bill 2009

The Bill amends the Environmental Protection Act 1994, the Fisheries Act 1994, the Nature Conservation Act 1992 and the Sustainable Planning Act 2009. It was introduced into the Queensland Parliament on 12 November 2009 but was not debated until 10 March 2011. Because it has been before the house for more than 16 months, it is likely that the Parliament will be anxious to finalise the Bill quickly.

Amendments to the Sustainable Planning Act 2009

The Bill amends the Sustainable Planning Act 2009 to provide that a concurrence agency or the assessment manager may impose a condition related to an environmental offset on a development approval.

An environmental offset condition may only be imposed if the concurrence agency or assessment manager is satisfied that the applicant has demonstrated that all other cost effective, on-site measures to avoid and/or minimise any negative impact the development has on the natural environment are being, or will be, carried out. The rationale is that environmental impacts from development must first be avoided, or minimised if they can not be avoided. For example, a project may be designed so that only 3ha of vegetation would be impacted, instead of 10ha. The impact on the 3ha can be minimised by trimming the vegetation instead of removing it. Any remaining impact may then be offset.

Notably, the Bill allows an environmental offset condition to require works or activities to be undertaken on a site other than the development site. Conditions of a development approval generally apply only to the land to which the development approval attaches.

An environmental offset condition is governed by the usual reasonableness and relevance tests, and the normal appeal rights apply.

Amendments to the Environmental Protection Act 1994

The Bill also amends the Environmental Protection Act 1994 by introducing the concept of an environmental offset condition and expressly allowing the administering authority to impose an environmental offset condition for a number of environmental authorities, including for mining activities, petroleum activities and mining leases.

How environmental offset conditions work

An environmental offset condition is a condition that requires, or otherwise relates to, an environmental offset. Environmental offsets are works or activities undertaken to counter-balance the impacts of the relevant activity on the natural environment. The conditioning powers vested in concurrence agencies are administered through the Queensland Government's Environmental Offsets Policy, and the offset policies related to specific issues that are formulated under it. Those policies are currently:

  • Vegetation Management - Policy for Vegetation Management Offsets (September 2007), Department of Natural Resources and Water;
  • Marine Fish Habitat - Mitigation and Compensation for Works or Activities Causing Marine Fish Habitat Loss (2002), Department of Primary Industries and Fisheries; and
  • Koala Habitat - Offsets for Net Benefit to Koalas and Koala Habitat (2006), Environmental Protection Agency.

Local governments may also require environmental offsets as outlined in the Regional Plans. The Explanatory Notes to the Bill state that local governments are encouraged to apply the principles and guidelines of the Queensland Government's Environmental Offsets Policy when requiring environmental offsets.

An environmental offset condition will generally require a proponent to:

  • provide a financial contribution to an environmental offsets trust;
  • provide a guarantee and/or financial assurance; or
  • enter into an offsets agreement.

An offsets agreement will outline the actions the applicant must take to secure the offset, similar to an infrastructure agreement under the Sustainable Planning Act. The preferred approach is that an applicant enter into an offsets agreement before the approval is granted. A typical example of the process would be where an area is undergoing revegetation to offset the clearing of koala habitat. The offsets agreement would specify what type of vegetation must be planted, when it must be planted, the monitoring required, any fencing requirements, and so on. A condition of the approval would then be that the terms and conditions of the offsets agreement must be complied with.

The scope and size of the required offset will be determined by the amount and types of environmental values lost due to the development. The loss or damage may be measured using a 'metric', which is an objective measure of the particular environmental value.

If the offset takes the form of a financial contribution, the amount must cover the full costs of locating, securing and managing the relevant offset. This includes: search costs; transaction costs; any other administrative costs; market-based costs of purchase of an offset; market-based costs of agreements with third parties to supply an offset; costs of meeting management plan conditions; and costs of monitoring and reporting. A risk premium may also be added by the environmental offsets trust to cover risks to the trust's ability to secure an appropriate offset.

For more information on the Environmental Protection and Other Acts Amendment Bill 2009 or environmental offset conditions, please contact HopgoodGanim's Planning and Environment team.