A new era of environmental governance: national agencies and tougher penalties

• Issuing permits and licences
• Undertaking compliance and enforcement activities
• Activities delegated by the Minister, including assessments and decision-making about development proposals, including approval conditions.

A strong focus of the EPA Bill is securing the independence and transparency of the EPA. The EPA will be a separate statutory entity from the date it is established (rather than operating initially under the auspices of the Department as indicated in previous announcements). The EPA's CEO cannot be directed in the exercise of its responsibilities. While the Minister may provide the CEO with a non-binding Statement of Expectations and the CEO must respond with a Statement of Intent, the CEO is not otherwise required to comply with the Minister's wishes or directions. The CEO is also empowered to engage an advisory group of experts to assist the EPA in the performance of its functions and exercise of its powers, but again is not obligated to accept their recommendations.

These structures should afford the EPA with a broad discretion to exercise its powers and functions. The Minister will retain responsibility for setting government policy, rulemaking and, it is anticipated, the power to 'call in' approval decisions. These mechanisms are expected in Stage 3 of the reforms.

There are also measures proposed to ensure the EPA's operations are transparent. The Statements of Expectations prepared by the Minister, and Statements of Intent by the EPA, must be published online. The EPA is also required to establish and maintain a public register of decisions. The EPA will prepare annual reports and publish the results of independent five-yearly reviews into its activities.

The ELA Bill amends the EPBC Act to include a range of new compliance and enforcement tools for the CEO of the EPA, including tougher penalties. The new tools include:

• A new power to issue Environment Protection Orders, designed for use in urgent circumstances to prevent, rectify and mitigate conduct posing an imminent risk of serious environmental damage to a 'protected matter' or where serious damage has already occurred following a breach of the EPBC Act or with a condition of an environmental authority. An EPO can require an activity to stop or not commence, for the way in which activities are carried out to change, or for specified actions to be taken. The Bill creates significant penalties for non-compliance with an EPO (up to 1000 penalty units or $313,000), reflective of similar schemes in state and territory jurisdictions. There is no merits review for an EPO.
• A new civil penalty formula (modelled on comparable regimes targeting financial crime) for the most serious civil provisions in the EPBC Act, including taking an action without approval or breach of an approval condition. Significantly, corporations will face maximum penalties of the greater of 50,000 penalty units ($15,650,000), three times the value of the benefit derived/detriment avoided, or 10% of their annual turnover (up to a maximum of 2.5 million penalty units) ($782,500,000)). Imposing substantially higher penalties on breach of an approval condition brings a significant additional compliance risk for business, and new approval conditions should be reviewed carefully for ambiguity in requirements.
• Pecuniary penalties would also increase for the most serious criminal offences under Parts 3 and 9 of the EPBC Act. For example, the penalty for taking an action that has or is likely to have a significant impact on a listed threatened species will be punishable by imprisonment for a term of not more than seven years, a fine of not more than 1000 penalty units ($313,000) (increased from 420 penalty units or $131,460), or both.

The existing audit regime in the EPBC Act will also be expanded. Currently, 'directed environment audits' (where the Minister must give prior notice) are limited to people holding an environmental authority (Part 9 approval). Under the new laws, the Minister could issue notices requiring audits by persons who are subject to an EPO, a conservation order, a remediation determination or a remediation order.

The ELA Bill also introduces 'compliance audits' for a range of activities purported to be undertaken under the EPBC Act without prior notice. Compliance audits are intended to give the Minister an additional, flexible tool for monitoring compliance with the legislation.

Existing penalties for auditors who do not comply with an audit notice or who conceal information relevant to an audit will be retained. To help build community confidence in the audit system, there will be a new requirement for the Minister to maintain a register of independent auditors who can assist with both directed and compliance audits.

The ELA Bill also makes a targeted amendment to procedure for assessment of proposed actions under the EPBC Act by project proponents. Requests for information need to be accompanied with reasons for the request, and proponents will be given the opportunity to notify the Minister if they do not want requests for further information to 'stop the clock' on statutory decision timeframes in certain circumstances. This includes when the Minister is deciding:

• whether a proposed action is a controlled action;
• an assessment approach; and
• whether or not to approve the taking of an action.

The change is described as giving proponents a greater understanding of why further information is being requested, and a greater say in statutory decision-making timeframes. There are otherwise no changes proposed to assessment and approval processes in the Bills package, with these changes expected in Stage 3.

The HEIA will establish and maintain environmental economic accounts. Environmental economic accounts are statistical accounts that describe the condition of the environment and its relationship with the economy.

The HEIA will seek the assistance of the ABS in performing this function.

The HEIA must give the Minister a statement of at least one account per year. The Minister will table the statement in Parliament.

The HEIA will provide the Minister, the CEO of the new federal EPA and the public with access to high-quality information and data relating to the environment.

The Explanatory Memorandum to the Bill explains, 'Access to authoritative sources of high-quality environmental information underpins a Nature Positive Australia by informing policy, project, investment and regulatory decision-making'.¹

This will include, for members of the public, access to a searchable, non-statutory, national public portal. The portal will contain information from a range of sources, including scientific bodies, academic institutions, stakeholders, environmental groups, the Government, and state and territory agencies.

The HEIA must maintain a register of national environmental information assets.

Data, information or a system that is maintained by a federal entity, a state or territory government body or any other person or body may be declared to be a national environmental information asset.

Under current law, a State of the Environment Report must be prepared every five years.² The 2021 report was authored by independent environmental scientists and experts.

Under the Bill, the HEIA must report on Australia's State of the Environment every two years. The report will draw on knowledge of scientists and Aboriginal and Torres Straight Islander peoples.

Within six months of publishing a report, the Minister must table a response in Parliament. The response will specify environmental targets and timeframes.

The next report will include information about progress towards meeting these national environmental goals. The report will also analyse trends relating to the state of the environment.

While the Bill provides that the HEIA may request information, advice or documents from any person or body, there is no penalty for failing to comply with a request.

Entrusted persons can use or disclose relevant information in accordance with the Bill.

There are protections in the Bill against unauthorised use or disclosure of protected information. An example of a category of protected information is information that, should it be disclosed, could reasonably be expected to prejudice the protection of public safety or the environment.

There will be an independent review of the operation of the new law every five years. The first review must be completed by 30 June 2030.