Nothing gets interest groups more riled up than a proposal to reduce some regulation or, as business groups like to call the federal Environment Protection and Biodiversity Act (EPBC act), “green tape”.

In the green corner, we have the major environment groups arguing that such reductions signal further retreat by government in the face of a noisy business lobby. In the blue corner, we have big business hailing long-overdue reform of a system that costs a lot and delivers little. Ding, ding, ding. Let the fight begin.

If only policy debate was as simple as the duelling press releases make out. Consider, for example, the way the environmental impact assessment and approval (EIAA) regime currently works under the EPBC Act.

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This EIAA process applies only to developments that could have adverse impacts on “matters of national environmental significance”, including World and National Heritage values, threatened species and ecological communities, and the Commonwealth marine environment. If a development could have a significant impact on one of these national matters, the proponent is required to refer it to the federal environment minister, who then decides whether it needs formal assessment and approval. At the end of the process, the federal minister has the power to stop projects and impose conditions.

Business groups argue that this federal process is unnecessary because it duplicates similar processes that apply at the state and local government level. To save time and resources, they want to cut Commonwealth involvement in environmental regulation to the bare minimum and leave it to the states, who have traditionally dominated this field.

Environmentalists counter that the Commonwealth EIAA regime provides “back-up” for often defective state processes and that, without this oversight, there will be a rush to the bottom.

The environmental lobby’s position is complicated by fact that the EIAA regime has been stunningly ineffective. It doesn’t apply to forestry operations under the Regional Forestry Agreements and has barely applied to forestry activities outside the RFA areas. It has had virtually no impact on the rates of native vegetation clearing, hasn’t had a material impact on unsustainable patterns of water use, hasn’t affected fisheries practices in state waters and hasn’t improved the condition of Australia’s World and National Heritage areas. It also doesn’t regulate greenhouse gas emissions.

There have been some instances where improved outcomes have been achieved (e.g. the EPBC Act was used to stop the Traveston Dam in Queensland, a Tasmanian government proposal to drain an important lake for irrigation at the end of the millennium drought, and the Victorian government’s cattle grazing “trial” in the alps) but, beyond these, the evidence of environmental achievement is thin to non-existent.

The EIAA regime’s ineffectiveness is a product of several factors. It is poorly designed, with its operation hinging on an inherently subjective “significant impact” test. Due to this, proponents find it hard to determine when it applies and the department has struggled to enforce it. The federal government, under the Coalition and ALP, has also been reluctant to resource and enforce the legislation, particularly against the sectors that have the greatest impact on the environment; agriculture, forestry and fisheries.

Further, the sectors that have been most affected by the regime — mining, urban development, and water management (mostly major dams and pipeline projects) — are already covered by mature state regulatory regimes, leaving less for the Commonwealth to do.  The politics surrounding these types of projects are also similar at the state and federal level and, as a result, the Commonwealth is usually no more likely to push for progressive environmental outcomes than the states.

Although it has achieved very little, like any regulatory regime, the EIAA regime comes with costs. The Commonwealth spends roughly $30 million-$40 million a year administering the regime and the costs of compliance for business have been significant. On top of these costs are those incurred by third parties in participating in the regime, including the costs in making submissions (most of which are ignored) and running litigation (most of which has been unsuccessful).

In short, the 12-year policy experiment that is the EPBC Act’s EIAA regime has proven to be expensive and environmentally ineffective.

Given this, it is tempting to conclude that the best thing the Commonwealth could do is vacate the field. This would leave the states with free reign over the environment, something that hasn’t worked in the past. As if to emphasise this, the New South Wales and Queensland governments are already making noises about winding back their land-clearing restrictions. The wiser business groups recognise that, for the reform process to work, costs need to be cut in a way that facilitates improvements in environmental outcomes.

How can this be achieved? The most promising reform proposal is for the Commonwealth to concentrate its energies on strategic assessments and regional planning. Under this model, the Commonwealth would have a reduced role in the assessment and approval of individual projects but would set the environmental ground rules for development and state approvals. Spatial planning maps and other like instruments could be used to identify important environmental areas and lay down when and how development could occur in these areas. Having created these instruments and determined the principles for development, project-level regulation could largely be left to the states, provided they adhere to the federal rules.

This is not a new idea — Sir Garfield Barwick floated a similar idea the 1960s and it has been mooted ever since. The challenge is to make it work. If they can do this, the environment and business stand to benefit.

*Andrew Macintosh is the associate director of the ANU Centre for Climate Law & Policy and Richard Denniss is the executive director of the Australia Institute

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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