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Focus: Legal certainty for environmental offsets in Queensland

20 May 2011

In brief: The power of administering agencies in Queensland to impose offset conditions on development approvals or other approvals for activities which impact on the environment has been confirmed in recent legislative amendments. Partner Bill McCredie (view CV) and Lawyer Faheem Anwar look at the offsets provisions the new legislation introduces. 

How does it affect you?

  • The new legislation expressly confirms that administering authorities have the power to impose environmental offset conditions on development approvals generally and for environmental authorities with respect to mining, petroleum and greenhouse storage activities.
  • Given the breadth of the new provisions, it is expected that environmental offset conditions will become increasingly common in relation to both environmental authorities and development approvals.

Background

An environmental offset refers to a requirement to take positive actions to counterbalance unavoidable negative environmental impacts caused by an activity or development, once all options first to avoid and then mitigate the negative impact have been exhausted. Environmental offsets have been used in Queensland for a number of years. By allowing any unavoidable negative impact to be counterbalanced, environmental offsets provide some flexibility to project proponents for activities to achieve acceptable environmental standards, despite their impact.

Environmental offsets provisions 

The Environmental Protection and Other Acts Amendment Act 2011 (Qld) (the Amendment Act), which commenced on 5 May 2011, inserts provisions in the Environmental Protection Act 1994, the Sustainable Planning Act 2009 and the Fisheries Act 1994, which place beyond doubt that administering authorities have the power to impose environmental offset conditions for environmental authorities for mining, petroleum and greenhouse storage activities, development approvals and fisheries development approvals. All of the newly introduced environmental offsets provisions, in the various amended Acts, are drafted similarly.

A requirement for an environmental offset will only be activated where the relevant administering authority is satisfied that all cost-effective on-site mitigation measures have been or will be undertaken. An offset condition may require the environmental offsets to be undertaken on the geographic site of the environmental impact or on other land in Queensland. An environmental offset condition may also require a monetary payment to the State's Balance the Earth Trust or any other trust established to manage environmental offset funds.

The environmental offsets provisions envisage that the relevant administering authority, and the party required to provide an offset, will enter into a binding agreement that details the exact nature of the offset and the actions that must be undertaken to give effect to the offset. The party required to provide an offset may also enter into agreements with other entities, such as a relevant local government, to contract out the performance of those actions.

It is important to note that an environmental offset may only be used to counterbalance the detrimental impact on the natural environment. It is not the appropriate instrument for counterbalancing detrimental impacts on amenity, or aesthetic or any other social or economic factors.

Environmental offsets policy

The power to impose environmental offsets enacted by the Amendment Act will be exercised in accordance with the Queensland Government Environmental Offsets Policy (the QGEOP), which came into effect on 1 July 2008. The QGEOP specifies that offsets should only be required as a condition of an approval where there is a specific-issue offsets policy. Specific-issue offsets policies are subordinate to the QGEOP and provide detailed directions for offsets that address a specific environmental issue.

Currently there are three specific-issue offsets policies in force:

  • Policy for Vegetation Management Offsets;
  • Mitigation and Compensation for Works or Activities Causing Marine Fish Habitat Loss; and
  • Offsets for Net Benefit of Koalas and Koala Habitat.

In addition, offsets may be required as an approval condition:

  • by the Coordinator-General under the State Development and Public Works Organisation Act 1971; and
  • as an interim arrangement until a biodiversity specific-issue offsets policy is developed.

The QGEOP provides that, as an interim measure until a specific-issue offsets policy is developed, offsets that comply with the principles and guidelines of the QGEOP may be used on a case by case basis in the following approval processes:

  • permits for the clearing of protected plants under the Nature Conservation Act 1992;
  • activities that involve clearing of vegetation in state forests;
  • environmental authorities for mining, petroleum and greenhouse gas storage activities under the Environmental Protection Act; and
  • development assessment measures involving the provision of compensatory habitat or resources under the Implementation Guideline for Development Assessment for Queensland's Coastal Policy.

Generally, the administering authority will require offsets to be legally secured before the work that will have a negative impact on the environment can be carried out.

Conclusion

Since 2008 the Queensland Government has taken steps to develop a framework for regulating environmental offsets. The recent enactment empowering authorities to impose offset conditions represents a significant advance in the development of the regulatory framework.

Currently, environmental offsets conditions are common in relation to vegetation management, marine fish habitat and koala habitat issues. Given the breadth of the new offsets provisions, it is expected that as other specific-issue offsets policies are developed, environmental offsets conditions will become even more prevalent in relation to both environmental authorities and development approvals.

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