Consultation paper on cost recovery under the Environment ...€¦ · Web viewCost recovery arrangements are subject to regular review through a Cost Recovery Impact Statement (CRIS)

Consultation paper on cost recovery under the Environment Protection and Biodiversity Conservation Act 1999

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Page 1 of 73 Consultation Paper on Cost Recovery under the EPBC Act


TABLE OF CONTENTS

GLOSSARY.................................................................................................................................................... 4

1 OVERVIEW............................................................................................................................................ 5

1.1 CONSULTATION STRATEGY AND HOW TO CONTRIBUTE YOUR VIEWS.....................................................................6

2 COST RECOVERY AND REFORM OF THE EPBC ACT..................................................................................7

2.1 OVERVIEW OF THE EPBC ACT.....................................................................................................................72.2 REFORM OF THE EPBC ACT........................................................................................................................72.3 WHAT IS COST RECOVERY?.........................................................................................................................92.4 WHY IS COST RECOVERY BEING CONSIDERED?...............................................................................................102.5 WHAT ACTIVITIES UNDER THE EPBC ACT SHOULD BE COST RECOVERED?...........................................................10

2.5.1 Inter/intra government charging...................................................................................................112.5.2 Existing cost recovery arrangements not under consideration.......................................................12

2.6 HOW WILL COST RECOVERY FUND THE REFORM OF THE EPBC ACT?.................................................................122.7 HOW HAVE COSTS BEEN DETERMINED IN THIS CONSULTATION PAPER?..............................................................142.8 IS THERE A RISK OF OVER OR UNDER-RECOVERING COSTS?..............................................................................142.9 QUESTIONS—COST RECOVERY (GENERAL)...................................................................................................15

3 INDIVIDUAL ENVIRONMENTAL IMPACT ASSESSMENTS........................................................................16

3.1 WHAT IS INVOLVED IN THIS FUNCTION?......................................................................................................163.1.1 Environmental impact assessment process....................................................................................163.1.2 Who is regulated?..........................................................................................................................19

3.2 WHAT ARE THE REFORMS TO ENVIRONMENTAL IMPACT ASSESSMENTS UNDER THE EPBC ACT?.............................203.3 WHY IS COST RECOVERY APPROPRIATE FOR ENVIRONMENTAL IMPACT ASSESSMENTS?..........................................223.4 WHAT ARE THE COST RECOVERY OPTIONS?..................................................................................................223.5 WHAT ARE THE COSTS?............................................................................................................................23

3.5.1 What drives the cost of providing the service?...............................................................................233.5.2 What is included in the cost of providing a service?.......................................................................243.5.3 What is the cost of providing the service & how will fees be determined?.....................................263.5.4 Potential charging model for full cost recovery..............................................................................30

3.6 QUESTIONS FOR STAKEHOLDERS—ENVIRONMENTAL IMPACT ASSESSMENTS........................................................33

4 WILDLIFE TRADE REGULATION............................................................................................................ 34

4.1 WHAT’S INVOLVED IN THIS FUNCTION?.......................................................................................................344.1.1 Wildlife trade permit process.........................................................................................................354.1.2 Who is regulated?..........................................................................................................................35

4.2 WHAT ARE THE REFORMS TO WILDLIFE TRADE REGULATION UNDER THE EPBC ACT?...........................................364.3 WHY IS COST RECOVERY APPROPRIATE FOR WILDLIFE TRADE REGULATION?........................................................374.4 WHAT ARE THE COST RECOVERY OPTIONS?..................................................................................................384.5 WHAT ARE THE COSTS?............................................................................................................................39

4.5.1 What drives the cost of providing the service?...............................................................................394.5.2 What is included in the cost of providing a service?.......................................................................404.5.3 What is the cost of providing the service and how will fees be determined?.................................414.5.4 Potential charging model for full cost recovery..............................................................................44

4.6 QUESTIONS FOR STAKEHOLDERS—WILDLIFE TRADE REGULATION......................................................................46

5 STRATEGIC ASSESSMENTS................................................................................................................... 47

5.1 WHAT’S INVOLVED IN THIS FUNCTION?.......................................................................................................475.1.1 Strategic assessment process.........................................................................................................47


5.1.2 Who is regulated............................................................................................................................485.2 WHAT ARE THE REFORMS TO STRATEGIC ASSESSMENTS UNDER THE EPBC ACT?.................................................485.3 WHY IS COST RECOVERY APPROPRIATE FOR THIS FUNCTION?...........................................................................495.4 WHAT ARE THE COST RECOVERY OPTIONS?..................................................................................................49

5.4.1 Strategic assessment cost recovery model—fee for service...........................................................515.4.2 Fee points.......................................................................................................................................52

5.5 WHAT ARE THE COSTS?............................................................................................................................525.5.1 What drives costs?.........................................................................................................................535.5.2 What is the cost of providing the service?......................................................................................53

5.6 QUESTIONS FOR STAKEHOLDERS—STRATEGIC ASSESSMENTS............................................................................54

APPENDIX A: EPBC ACT ACTIVITIES CONSIDERED ‘IN SCOPE’ FOR COST RECOVERY (DECISION TREES)...........55

APPENDIX B: EPBC ACT ACTIVITIES CONSIDERED ‘OUT OF SCOPE’ FOR COST RECOVERY...............................61

APPENDIX C: ENVIRONMENTAL IMPACT ASSESSMENT COSTS FOR DIFFERENT PROJECT COMPLEXITIES........65


Glossary

The following list is a summary of commonly used words and acronyms within this document

ARI Approval on Referral Information

Australian Government Cost Recovery Guidelines

Australian Government document outlining the principles and criteria for cost recovery activities.

CA Controlled Action

CITES Convention on International Trade in Endangered Species of Wild Flora and Fauna

CRIS Cost Recovery Impact Statement

Direct costs Those costs that can directly and unequivocally be attributed to a product.

EIA Environment Impact Assessment

EPBC Act Environment Protection and Biodiversity Conservation Act 1999

Fee Point The point in the assessment or application process that a fee is charged.

‘Free-Rider’ Effect Where a party can avoid costs by waiting for another party to pay a fee and seek approval first (ie: ‘free riding’ on the approval of others).

Indirect costs Indirect costs are costs that are not directly attributable to a product and are often referred to as overheads.

Matters of NES Matters of National Environmental Significance

NCA Not a Controlled Action

NCA/PM Not a Controlled Action, provided the action is undertaken in a particular manner

NES National Environmental Significance

WTO Wildlife Trade Operation


1 Overview

On 24 August 2011 the Australian Government announced a major reform package to Australia’s national environment law, the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act). When it was introduced more than 10 years ago, it provided substantial powers to the Australian Government to regulate matters of national environmental significance (NES) and conserve biodiversity.

But over the decade since, our environmental management has evolved and the economy has continued to transform. Reform is needed to ensure this important legislation continues to work effectively in a modern Australia.

This new national approach to the protection of Australia’s environment and biodiversity will be better for the environment, better for business and will lead to better cooperation. The approaches in this environmental reform package ensure that we protect a healthy natural environment, as the foundation of our national prosperity and wellbeing. It will streamline national environment law and build better cooperation between government, industry and the wider community.

Overall, stakeholders and the environment will benefit from a more efficient and streamlined assessment process under the EPBC Act, which achieves the Australian Government’s environmental objectives. A more streamlined environmental regulatory system will allow projects to go ahead without unnecessary delay, which will in turn bring forward employment and investment growth opportunities, with the associated indirect impacts on the economy.

The department is proposing funding the reforms through cost recovery so that ongoing funding for the administration of the EPBC Act is directly and sustainably linked to the services that are provided. The pace and extent of reform delivered will be dependent on the level of cost recovery introduced.

This consultation seeks to:

Provide stakeholders with an overview of the costs and cost drivers associated with regulatory functions under the EPBC Act that may be appropriate to cost recover

Obtain industry views on those reforms that will most improve the efficiency of the regulatory system and represent ‘value for money’ under a cost recovery arrangement.

Feedback received as part of this consultation will inform the government’s decisions on the most appropriate mechanisms for cost recovery under the EPBC Act. This feedback will also inform the development of a Cost Recovery Impact Statement, which would be prepared in accordance with the Australian Government’s Cost Recovery Guidelines.


1.1 Consultation strategy and how to contribute your views

This consultation process is targeted towards those stakeholders regulated or otherwise affected by the EPBC Act. This may include:

business and industry groups importers and exporters of flora and fauna and their products local, state, territory and Commonwealth government agencies community and special interest groups.

The public consultation period is open for 6 weeks. Comments will close on 31 October 2011.

This consultation paper poses a range of questions targeted at key issues for cost recovering EPBC Act regulatory activities and reform. In responding to these questions, stakeholders will help inform the development of a cost recovery system for the EPBC Act. General views on cost recovery relevant to the EPBC Act that are not specifically addressed in the questions of the consultation paper are also welcome, and all feedback is appreciated.

If requested, the Department of Sustainability, Environment, Water, Population and Communities (the department) can make officers available to attend industry or stakeholder meetings to discuss issues raised in this paper.

All submissions will be published on the department’s website. If your submission includes confidential information, please contact the department by email or phone to discuss any special requirements for your submission.

All views received during consultation will inform what action will be proposed by the department and reported back to government. Based on the outcomes of consultation, the government will then be able to make an informed choice on cost recovery options to resource the activities delivered by the EPBC Act.

This is your chance to have your say about your views on cost recovery options for the EPBC Act.

Submissions can be made to the following address:

Email: [email protected]

Mail: EPBC Act Cost Recovery consultationEPBC Reform TaskforceGPO Box 787Canberra ACT 2601

Phone: 1800 423 135


2 Cost recovery and reform of the EPBC Act

2.1 Overview of the EPBC Act

The EPBC Act is the Australian Government's central piece of environmental legislation. It provides a legal framework to protect and manage nationally and internationally important flora, fauna, ecological communities and heritage places — defined in the EPBC Act as matters of national environmental significance. Further detail on the EPBC Act is available at: http://www.environment.gov.au/epbc/reform

The objectives of the EPBC Act are to:

provide for the protection of the environment, especially matters of national environmental significance

conserve Australian biodiversity provide a streamlined national environmental assessment and approvals process enhance the protection and management of important natural and cultural places control the international movement of plants and animals (wildlife), wildlife specimens and

products made or derived from wildlife promote ecologically sustainable development through the conservation and ecologically

sustainable use of natural resources.

The EPBC Act delivers these objectives through a broad range of statutory functions including:

issuing permits and approvals undertaking strategic assessments and marine bioregional planning listing heritage places, species and ecological communities for protection managing Commonwealth owned national parks compliance monitoring.

2.2 Reform of the EPBC Act

On 24 August 2011 the Australian Government announced the reform of the EPBC Act, and signalled the need for cost recovery in order to deliver the proposed reforms of the EPBC Act. This policy statement is available at: http://www.environment.gov.au/epbc/reform. The reform package has been informed by:

recommendations of the Independent Review of the EPBC Act recommendations of a Senate Inquiry into the operations of the EPBC Act extensive consultation with stakeholders.

This reform is about taking a more effective approach to environmental protection and biodiversity conservation, being more proactive, and using strategic approaches to address the complex issues that pose the greatest threat to Australia’s environment.


http://www.environment.gov.au/epbc/reform

http://www.environment.gov.au/epbc/reform

Industry stakeholders have indicated that improved business certainty, faster processing times and reduced red tape are the fundamental priorities to reform of the regulatory functions under the EPBC Act. While these reforms are likely to improve the efficiency of the regulatory system in the longer term, it is necessary to keep the current system running while reforms are developed and implemented. The current system is already not keeping pace under the existing demand, and therefore introduction of reform will come at a cost.

The department has already introduced a number of initiatives as part of continual improvement to the regulatory system, for example the development of specific referral guidelines for nationally listed species and ecological communities, industry-specific referral guidelines and survey guidelines for nationally threatened species. Most recently, the government released a new Consultation Draft Environmental Offsets Policy.


The environmental reforms include:

a more proactive approach to protecting Australia’s environment through more strategic assessments and regional environmental plans;

identifying and protecting ecosystems of national significance under the EPBC Act through regional environment plans, strategic assessments or conservation agreements to protect the most significant and healthy ecosystems before they are threatened or degraded;

a more cooperative approach to developing environmental standards by calling for expressions of interest in a new National Centre for Cooperation on Environment and Development that will bring together industry, scientists, non-government organisations and governments to work together on environmental standards, guidelines and procedures;

a more streamlined assessment process to cut red tape for business and improve timeframes for decision making, including an option for decisions on proposals within 35 business days, if all required information is provided;

new national standards for accrediting environmental impact assessments and approvals to better align Commonwealth and state systems;

a new Government Biodiversity Policy for consultation to further protect ecosystems across the continent and guide future biodiversity planning and programs – a draft policy was released for consultation on 24 August 2011;

establishing a single national list of threatened species and ecological communities to reduce inconsistencies between jurisdictions;

better regulation of international trade in wildlife by streamlining permits; more transparent information to inform communities about environmental assessments,

including making it standard practice to publish the department’s recommendation reports; better processes for heritage listing through more transparent listing processes based on a

single assessment list; development of an environmental offsets policy to better explain to proponents and the

community how offsets are assessed and what would be acceptable under specific proposals—a draft policy was released for consultation with industry and communities on 24 August 2011; and,

public consultation on possible introduction of cost recovery to ensure adequate resourcing for administration of the EPBC Act.

The department has also introduced a range of practices to address the increasing demand on the system, particularly environmental impact assessments. This includes restructuring environmental impact assessment areas to manage specific regions while retaining specialist industry sector assessment areas to manage work relevant to large industry sectors, including the mining industry, coal seam gas industry and offshore petroleum industry. A single ‘business entry point’ was also created to streamline the administrative requirements for validation of new referrals. Targeted internal staff training and workshops on condition setting and significance criteria have been rolled out to improve consistency of decision making between assessment areas, and a consolidated post-approvals management area has been formed within the department’s Compliance Branch to streamline post-approval requirements.

Despite these improvements, the current system does not have sufficient ability to respond to changes in demand, nor provide incentives to industry to undertake early engagement and incorporate the most environmentally acceptable outcomes into their business planning.

Cost recovery is therefore being investigated as part of the reforms to the EPBC Act, to not only provide increased resources to deliver the broader package of reforms to the legislation, but also provide a means by which the reformed regulatory system can respond to changes in demand and drive further efficiency.

2.3 What is cost recovery?

Cost recovery is the recovery of some or all of the costs of a particular activity. Used appropriately, cost recovery can provide an important means of improving the efficiency with which Australian Government products and services are produced and consumed. The Australian Government has Cost Recovery Guidelines that are based on a formal cost recovery policy designed to ensure consistency, transparency and accountability of Australian Government cost recovery arrangements. Further information can be found in the Australian Government’s Cost Recovery Guidelines.

In the context of the EPBC Act, appropriate cost recovery mechanisms have the potential to more equitably share the costs of protecting the environment between the community and those who derive a private benefit and a social license to undertake an activity from an approval or permit issued under the legislation.

Charges can be collected in a variety of ways and based on different measures of costs. Key principles outlined in the cost recovery guidelines include:

that the fees charged for an activity reflect the cost for that activity linking the charge or charges as closely as possible to the activity or product to be cost

recovered ensuring that cost recovery does not result in cross-subsidies between individuals designing a system that is cost effective to calculate, collect and enforce balancing certainty with the flexibility to modify the approach to cost recovery if ongoing

monitoring indicates that this is desirable ensuring all aspects of the charging mechanism are consistent with government policy

objectives ensuring that those entities that create the need for regulation bear the cost of regulation.


The introduction of a cost recovery system would require amendments to be made to the EPBC Act and the associated regulations.

2.4 Why is cost recovery being considered?

The Australian Government Cost Recovery Guidelines state that government agencies should set charges to recover all the costs of products or services where it is efficient to do so. These guidelines also state that the fees that are charged for an activity must reflect the cost to the government for delivering that activity. A cost recovery system under the EPBC Act would therefore provide the department with the resources necessary to implement the regulatory functions under the EPBC Act, and these resources would adjust based on the demand for these functions.

Cost recovery would also put a value on the services that the department provides, and introduce incentives to improve efficiency in the system. This cost recovery consultation process will provide the opportunity for industry stakeholder provide insight into how best to improve regulatory efficiency such that it the system can deliver better outcomes for business and the economy. Industry views will enable government to make informed decisions about those reforms that industry consider represent the best value for money, and in what circumstances it is not efficient or effective to apply cost recovery.

2.5 What activities under the EPBC Act should be cost recovered?

The Australian Government’s Cost Recovery Guidelines outline the process undertaken to determine whether a function is appropriate to cost recover. Some of the criteria that must be met for an activity to be cost recovered are:

Is there a clear beneficiary of an activity? Will other parties be able to gain a ‘free ride’ on the approval of the first applicant? Is charging consistent with policy goals? Is charging efficient and cost effective?

The department has determined that many of the functions under the EPBC Act are not appropriate to cost recover, as there is no clearly identifiable beneficiary of a particular service (for example, where the beneficiary is the environment and therefore the Australian public), or where cost recovery is not consistent with policy goals. An example of the latter is charging for the investigation of complaints or allegations of non-compliance, which could act as a disincentive for such reporting. A summary of the activities that have been determined not appropriate to cost recover is at Appendix B.


The regulatory activities under the EPBC Act that have been determined appropriate to investigate for cost recovery are:

Environmental impact assessments (including referrals, assessments, approvals, post-approval monitoring and audits)

Wildlife trade regulation

Strategic assessments.

These activities are appropriate to investigate for cost recovery as:

they deliver a clear benefit for a particular beneficiary there is no ‘free ride’ for other proponents charging for these activities would be consistent with policy goals under the EPBC Act it is efficient to implement as the department has direct contact with the proponents and

statutory decision points at which to charge fees it is cost effective given that costs for these services can be clearly defined.

Further detail on the analysis that was undertaken to determine that these activities meet the criteria for cost recovery under the government’s Cost Recovery Guidelines is contained at Appendix A .

2.5.1 Inter/intra government charging

The three activities that have been determined appropriate to investigate for cost recovery include proponents/applicants from government as well as private entities and individuals. Intra-agency or inter/intra-governmental charging arrangements are not included in the cost recovery guidelines for the purpose of the policy, but the cost recovery guidelines state:

‘Where Australian Government agencies have service level agreements or other cost recovery arrangements with State/Territory Governments or with other Australian Government agencies, these guidelines should be complied with to the greatest possible extent, depending on other government requirements’.

This paper explores the appropriateness of cost recovery from the non-government sector. However, to ensure equity in the funding model and to avoid industry cross-subsidisation of services to government clients, the department will also explore the potential of governmental charging. While there is no difference in the department’s costs for providing similar services to government and non-government clients, the government will make a decision on the most appropriate and equitable funding source for services to government clients.

During the consultation period the department will be consulting across government on the potential government charging models that would be efficient, cost effective and consistent with government requirements.


2.5.2 Existing cost recovery arrangements not under consideration

The department also notes that there are some small scale existing cost recovery arrangements for some activities under the EPBC Act that are not considered in this paper; however, the department may review those arrangements at a future time:

- Permits for some Commonwealth reserves managed by the Director of National Parks under EPBC Act. The Director is a Commonwealth Authorities and Companies Act 1997 (CAC Act) authority and review of cost recovery in relation to Commonwealth reserve fees, and the performance of the functions of the Director under the Act, will be carried out separately by the Director.

- Permits under Part 13 of the EPBC Act are required for actions that may kill, injure, take or trade listed threatened species, migratory species, marine species (and cetaceans) in Commonwealth areas. There are a small number of permits subject to limited cost recovery under Part 13 of the EPBC Act. A small number of stakeholders currently apply for these permits, and the fee schedules are not proposed for review at this time as an overhaul to the system is unlikely to be efficient and effective due to the limited number of permits issued. Note that these permits are separate from Part 13 accreditations for fisheries under sections 208A, 222A, 245 and 265 of the EPBC Act, which are outside the scope of cost recovery (refer Appendix B ).

2.6 How will cost recovery fund the reform of the EPBC Act?

Cost recovery mechanisms for the environmental impact assessment (EIA) function and the wildlife trade function are proposed to recover the costs of providing these services from the proponents and applicants who benefit from them. The fee for service that applies would be commensurate with an improved level of service, as cost recovery may allow the government to better resource these functions and improve efficiency. At present, a workload increase doesn’t automatically result in an increase in resources, and as such an increased workload can lead to unnecessary delays. However cost recovery would enable resources to be commensurate with workload.

Under a full cost recovery arrangement for environmental impact assessments, the staffing resources required to meet statutory timeframes will be committed at the time of making a controlled action decision. Staffing resources, and therefore costs, will be determined based on the assessment level determined for the project, and the complexity of the assessment. These staffing resources reflect the resources required throughout the assessment process to service the project. It is the department’s expectation that committing specific resources to an assessment process will lead to a faster assessment overall that meets statutory timeframes. A full description of these proposed cost recovery arrangements, including estimated fees, is in Chapter 3.

Under a full cost recovery arrangement for wildlife trade regulation, the staffing resources required to service the assessment of a permit application will be guaranteed when an application is lodged and the permit payment made. The estimated permit fees, outlined in detail within Chapter 4, reflect the estimated resources required to undertake the permit assessments. Currently, the permit fees that are charged only partially cover costs, and some activities that are eligible for cost recovery do not charge fees. As such, the department’s budget funding is supplementing the cost of


delivering this service. A full description of these proposed cost recovery arrangements is in Chapter 4.

The fee for service for both environmental impact assessments and wildlife trade regulation would also include the technical and operational costs that are essential to delivering these services, such as the business systems and legal support. A business improvement charge is also proposed that will go towards funding those reforms that will directly benefit the EIA and wildlife trade processes, respectively. It is expected that these reforms will directly reduce the cost of delivering these functions over time, and therefore lead to reductions in the fees required to deliver these services in the future (see section 2.8 for further discussion of cost recovery adjustments).

Table 2.1 outlines the reforms to the EPBC Act that will be funded as a result of cost recovery of the EIA and wildlife trade functions. These reforms are discussed in detail within Chapters 3 and 4.

Table 2.1 – The reforms to the EPBC Act that will be delivered through cost recovery of the EIA and wildlife trade functions. Regulatory activity proposed for cost recovery

Reforms to the EPBC Act that will be delivered through cost recovery

Environmental impact assessment

Improved service delivery.

Faster assessments through a new approval on referral information process.

More guidance for better business certainty and better environmental outcomes, including increased guidelines and self-assessment tools and new statutory determinations that will provide legal certainty regarding whether a project requires referral.

Better cooperation between the department, proponents and other regulators, through national standards for environmental impact assessment, improved coordination of statutory processes, opportunities for joint assessment panels and specific initiatives to streamline assessments for specific industries subject to multiple pieces of Commonwealth legislation.

Streamlined and more transparent assessments through increased information publication, including recommendation reports for decisions and advice of expert councils and committees.

Wildlife trade regulation

Improved service delivery.

Improved business systems and streamlining of wildlife trade permitting arrangements through online submission of applications, reduced processing times and online tracking of applications.

Streamlined assessments through the investigation of options for accreditation to remove the need for individual permit applications for accredited operators and/or industry sectors. Options to consolidate export categories will also be investigated to simplify the application process.


At this stage the government intends to continue resourcing the delivery of strategic assessments and the new regional sustainability plans through budget funding. However, potential cost recovery of strategic assessments would enable the government to undertake and deliver more strategic assessments. The department considers that cost recovery of strategic assessments may not be appropriate in all cases, and this is discussed further in Chapter 5.

2.7 How have costs been determined in this consultation paper?

The costs presented in this paper for environmental impact assessments and wildlife trade regulation have been estimated based on a combination of historical data, as well as focus groups comprising experienced case officers within the department. These focus groups examined a small number of case study projects that were considered to represent ‘cost effective best practice’, and featured early engagement with proponents, timely servicing of the project and liaison with the proponent throughout the assessment period, and met all statutory timeframes. More detailed costing analysis will be undertaken over the coming months to refine the costing model, and this will be informed by stakeholder views on the costing methodology. Therefore, costs presented in this consultation paper should be treated as estimates only and may change due to refinements in the costing model and subsequent government decision on cost recovery.

2.8 Is there a risk of over or under-recovering costs?

Government cost recovery is designed to recover the cost of providing a product or service. It must not make a profit or lead to one party overpaying such that the delivery of a service to another parties is subsidised (known as ‘cross-subsidisation’).

The department will ensure the introduction of cost recovery under the EPBC Act does not result in double charging for the same service in situations where an action or activity is subject to more than one piece of Commonwealth legislation that is subject to cost recovery. The recovered costs would, however, still reflect the cost of providing the service. For example, where an offshore petroleum activity requires an approval under the EPBC Act as well as the Commonwealth Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act), there would be a fee for service to the department to administer the EPBC Act requirements and a fee for service to the offshore petroleum regulator to administer the OPGGS Act (from 1 January 2012 the offshore petroleum regulator is likely to be the proposed National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)). Following investigation of streamlining opportunities between the EPBC Act and OPGGS Act, as outlined in the list of reforms in Chapter 3, these costs may be reduced to reflect the reduced level of service required by the department and/or NOPSEMA to satisfy both pieces of Commonwealth legislation.

As part of the consultation process, the department is specifically seeking stakeholder views on the circumstances in which fees may be waived, including the breadth and applicability of exemptions for farms and small businesses. If there are provisions for fee waivers or exemptions introduced as part of a cost recovery system, the cost of delivering activities where fees are waived would be budget funded. The fees paid by other stakeholders would not be used to pay for a service provided to another private individual, because all fees are commensurate with the cost of delivering a


specific service (that is, the fee a stakeholder pays will cover only the costs of the service that they receive).

Cost recovery arrangements are subject to regular review through a Cost Recovery Impact Statement (CRIS) at least every five years in accordance with the Cost Recovery Guidelines. This review process ensures that cost recovery remains appropriate for the activity and that the design of cost recovery charges is efficient and equitable and that charging does not lead to over or under recovery.

Government has determined that any cost recovery arrangements introduced under the EPBC Act must be subject to an evaluation in the 2017–18 financial year, four years after the anticipated date for the introduction of any cost recovery arrangements. This review would take account of efficiencies to the system that have been gained by the reform of the EPBC Act, and review the costs of providing regulatory services to determine the efficiency, cost effectiveness and appropriateness of cost recovery, and whether the mechanisms and fees require re-evaluation. The outcomes of this review would be made publically available, would include public consultation and would be documented in a new CRIS where appropriate.

Following this initial cost recovery review, the department will undertake periodic reviews across the portfolio to ensure ongoing transparency and accountability of the cost recovery arrangements, as required by the Cost Recovery Guidelines. Proponent views are welcome on the timeframe for this periodic review. It should also be noted that any material fee changes (for example, an increase or decrease greater than annual Consumer Price Index), or any material redesign of the cost recovery charges will also require a new or amended CRIS to demonstrate that such changes are appropriate.

2.9 Questions—Cost recovery (general)

What are your views on the introduction of cost recovery to reform the EPBC Act, including the proposed benefits that cost recovery would fund?

What would your expectations be of improved service if cost recovery measures were introduced under the EPBC Act?

What other government fees and charges do you have to pay in undertaking your business? What is your experience in dealing with these charges?

In what circumstances should fees be waived or reduced for activities being considered for cost recovery under the EPBC Act?

Do you have other suggestions for resourcing reforms to this regulatory system?

The Australian Government Cost Recovery Policy requires cost recovery arrangements to be reviewed through a Cost Recovery Impact Statement (CRIS) at least every five years, and this is a public document. Do you consider this timeframe is appropriate for review of cost recovery arrangements under the EPBC Act?

How should regular adjustments to cost recovery fees be designed to remain commensurate with the cost to the department of providing the service?


3 Individual environmental impact assessments

Referrals, assessments, approvals, post-approval monitoring and audits under Chapter 4 of the EPBC Act.

3.1 What is involved in this function?

A key function of the EPBC Act is the protection and management of matters that are nationally significant. These nationally protected matters are:

world heritage properties national heritage places wetlands of international importance (Ramsar wetlands) nationally threatened species and ecological communities migratory species Commonwealth marine areas the Great Barrier Reef Marine Park the environment where nuclear actions are involved (including uranium mines).

Under the EPBC Act it is an offence to take an action that results in a significant impact to these matters without an approval issued under the EPBC Act.

3.1.1 Environmental impact assessment process

The standard environmental impact assessment (EIA) process is outlined in figure 3.1.

Where an activity is likely to have a significant impact on one or more matters of national environmental significance (NES), or where the proponent of an activity is unsure of the requirement to obtain an approval, they can refer the proposal to the department for a decision whether or not the action will have a significant impact on nationally protected matters. The statutory timeframe for the decision making process is 20 business days.

If a significant impact is considered likely, this action is determined to be a ‘controlled action’, and further assessment will be required prior to the federal environment Minister determining whether to approve the project under the EPBC Act, and the conditions that may apply to such an approval.

If a significant impact is unlikely and further assessment is not required, the proposal is either determined to be ‘not a controlled action’, and can proceed as referred, or may be determined to be ‘not a controlled action’ provided it is undertaken in a ‘particular manner’ that will mitigate or manage the action. This ‘manner’ is specified in the decision notice as conditions on the action1.

Where a significant impact on matters of NES is likely and further assessment is required, this assessment may be undertaken by one of five assessment options: preliminary documentation, environmental impact statement, bilateral agreement or accredited assessment, joint assessment

1 Under the EPBC Act reform agenda, amendments to the legislation are proposed that will ensure that the requirements of the ‘particular manner’ are conditions on the action. This will improve compliance with the requirements, and also allow a further amendment that will enable the conditions on a proposal to be varied after the decision is made, subject to public transparency requirements.


panel or public inquiry2. The assessment method is determined based on the complexity of the activity, the information required to assess whether or not the action should be approved, and whether a parallel state or territory process is being undertaken that can satisfy the Commonwealth assessment requirements.

Figure 3.1 – Overview of the new environmental impact assessment process under the EPBC Act, including the new assessment approach options. The new assessment on referral information process is not shown.

2 Under the EPBC Act reform agenda, an amendment to the EPBC Act is proposed that will remove the Public Environment Report assessment level. This was a recommendation arising from the Independent Review of the EPBC Act. The ‘assessment on referral information’ is also proposed to be repealed, in favour of an improved process called ‘approval on referral information’, which is outlined in section 3.5.3 of this chapter.


Action referred by proponent

Decision on whether further assessment is required

Not controlled actionor

Not controlled action (Particular manner)

Controlled action

Decision on assessment approach

Assessment by preliminary

documentationAssessment by environmental

impact statement (EIS)

Assessment under a bilateral

agreement or accredited assessment

process

Decision on Approval

Action approved(with or without

conditions)

Post approval monitoring

Action not approved

Assessment by joint

assessment panel

Assessment by public inquiry

Action determined clearly unacceptable

In all cases, following the conclusion of the assessment process a decision is made on whether to approve the activity, and where an action is approved there may be conditions associated with this approval. Where there are conditions, there is likely to be monitoring required following the approval decision, which may include assessing and approving management plans in order for all or part of the action to proceed, ensuring the security of any offsets contained in the conditions, as well as tracking the progress of the action to ensure conditions are met.

A further assessment option is the new approval on referral information (ARI) assessment process, proposed under the EPBC Act reform agenda. This will replace the current assessment level of ‘assessment on referral information’, which has been difficult to implement. The new ARI process requires early engagement between the department and a proponent to understand a project and develop a management strategy early in the process. Successful engagement in this manner will result in the proponent submitting the proposed conditions of approval at the time of submitting the referral. An ARI will only be applicable where the complexity of the project is low and the impact is restricted to a limited number of controlling provisions and individual places/species. A decision will be made as to whether the referral meets the ARI requirements before proceeding with a 35 business day process to make a decision on approval. 15 days of public comment are included within this 35 business day process, and at the end of the process the project may be approved (with or without conditions), not approved, or determined to be a controlled action that requires further assessment under one of the assessment methods outlined above.

If an approval is given for the project, post-approval monitoring will be required in the same manner as an approval granted under the standard EIA process.


3.1.2 Who is regulated?

A broad variety of proponents have projects subject to the EIA provisions of the EPBC Act, ranging from private individuals and small businesses right up to some of the largest companies in the world, and government agencies. The chart shown in Figure 3.2 demonstrates the range of different activities regulated under the EPBC Act, by proportion, since the commencement of the EPBC Act.

Agriculture and forestry; 0.7%

Aquaculture; 0.4%

Commercial development; 6.1%

Commonwealth; 2.8%

Energy generation and supply (non-renew-

able); 6.5%Energy generation and

supply (renewable); 3.5%

Exploration (mineral, oil and gas - marine);

11.1%

Exploration (mineral, oil and gas - non-ma-

rine); 1.0%Manufacturing; 0.4%

Mining; 14.3%

Natural resources management; 4.6%Private; 0.9%

Residential devel-opment; 14.5%

Science and research; 2.1%

Telecommunications; 0.8%

Tourism and recreation; 5.1%

Transport - air and space; 0.8%

Transport - land; 12.6%

Transport - water; 2.8%

Waste management (non-sewerage); 1.1%

Waste management (sewerage); 2.1%Water management and use; 5.9%

Referrals by category under the EPBC Act1 July 2007 - 30 June 2011

Figure 3.2 – Activity types referred under the EPBC Act over the last four years. A total of 1706 referrals were received during this period.


3.2 What are the reforms to environmental impact assessments under the EPBC Act?

The reforms to environmental impact assessment regulation under the EPBC Act are fundamentally aimed at delivering a faster regulatory approval system that reduces unnecessary project delays to the extent that these are created by increased demand on the system that exceeds current departmental resources and a lack of coordination with state/territory assessment processes.

Introducing fees that matched the resources required for a project would allow increased early engagement with the department, which would give proponents of projects access to better information. Guidelines and a shift toward self-assessment may further reduce administrative costs, to the extent that unnecessary referrals are avoided. Improving the bilateral approval processes across levels of government may also reduce compliance costs for businesses. Each of these measures would contribute to time saving across the entire regulatory process, including delays that are not measured under statutory timeframes (for example, while the proponent gathers information).

The specific reforms that are proposed for environmental impact assessments are:

Reform Description of reform and deliverables for stakeholders

Improved service delivery

The statutory timeframes within the EPBC Act are necessary to enable appropriate public consultation and deliver robust statutory decisions. These timeframes cannot be reduced without compromising this transparency and legal accountability. The department can, however, improve service delivery where costs for delivering these services are recovered, as the cost for the service is a direct reflection of the amount of staff time and other resources that are invested in the decision-making process.

Under a full cost recovery arrangement, the staffing resources required to service a project will be committed at the time of making a controlled action decision. Staffing resources, and therefore costs, will be determined based on the assessment level determined for the project, and the complexity of the assessment. These staffing resources reflect not only the time required during statutory timeframes, but the time the department is committed to providing the proponent to review draft documentation and provide guidance throughout the assessment process.

The department is seeking views from stakeholders on ‘service level standards’ that the department could consider introducing to ensure that the level of service is transparent, and proponents can incorporate these service standards into their planning (for example, the timeframe for review of draft assessment documentation, management plans, etc).

Faster assessments

A new approval on referral information process will offer proponents a final decision in 35 business days for projects that meet specific criteria. Guidelines for proponents on how to meet the criteria for the new process will be developed in consultation with stakeholders. This is further explained in section 3.5.3.



More guidance for better business certainty and better environmental outcomes

New guidance material will be published on a regular basis to give proponents greater certainty about when they need to refer actions for assessment. The new guidance will include information for specific industries, locations and new self-assessment tools.

The department has also released a Consultation Draft Environmental Offsets Policy to provide a clear, consistent approach to determining offsets for proposals that are approved under the EPBC Act. This policy will provide greater certainty and guidance on when in the assessment process offsets can be considered, what constitutes a suitable offset and how they are determined under the EPBC Act.

A new provision will be introduced to the EPBC Act to enable the Minister to create binding determinations as to particular classes of actions that will or will not have a significant impact on matters of national environmental significance. These statutory determinations will provide legal certainty for proponents about whether their project requires referral and assessment, by allowing them to do a self-assessment in accordance with the determination.

The existing audit program will be expanded to capture an increased number of approved projects, including undertaking strategic audits of particular industries or types of projects where there is higher risk of environmental impacts and/or public interest. The objective of the audit program is to prevent impacts before they occur, and therefore assist proponents to meet their statutory requirements. The audit program also ensures that the environmental objectives of the decision making process are met, as well as ensuring ongoing public confidence in the EPBC Act and the associated decisions.

Better cooperation

Most major projects require environmental approvals from multiple jurisdictions. Reducing inconsistency between state or territory and Commonwealth environmental assessment processes will reduce costs to proponents, communities, governments and the economy and improve environmental outcomes. Better cooperation with the states will target:

Improving coordination of statutory processes Improving government performance on timeframes Developing national standards for environmental impact assessment Developing national biodiversity banking standards Opportunities for joint assessment panels A single national list for protected species and ecological communities.

Opportunities to streamline at the Commonwealth level will also be examined, including a specific examination of options to accredit systems and processes administered by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). Accreditation would be subject to these systems and processes providing equivalent environmental protection outcomes to the EPBC Act.

Streamlined and more transparent assessments

The decision process will be more transparent, with more information made public, including departmental recommendation reports for decisions, and the advice of expert councils and committees.


3.3 Why is cost recovery appropriate for environmental impact assessments?

The Australian Government’s Cost Recovery Guidelines outline the process undertaken to determine whether a function is appropriate to cost recovery. An analysis undertaken by the department determined that the environmental impact assessment process meets the guidelines for cost recovery, as the process delivers a direct benefit to a proponent without delivering a ‘free ride’ to other parties, charges would be consistent with policy goals, and charging is expected to be efficient and effective. Further detail is contained in the decision tree at Appendix A .

3.4 What are the cost recovery options?

The department envisages that the most appropriate option for cost recovery that would deliver fundamental reform to the system would be a fee for service based on the cost of the assessment, which would also include the technical and operational costs associated with delivering this service. The department also considers that a business improvement charge, based on a percentage of the total assessment fee, is a potential efficient and effective mechanism to fund some or all of the reforms to the EIA system that were outlined in section 3.2. This charging mechanism is explored in detail in section 3.5.2.

The combination of this fee for service and business improvement charge would result in an immediate improvement to the service the department provides, and provide a mechanism for the users of the system to contribute to the funding of reforms relevant to EIA in an equitable manner based on their demand on the department’s resources.

Without the business improvement charge, implementation of reforms would be slower, as the department’s resources to introduce reforms would be limited to the department’s budgetary capacity. The department considers that a business improvement charge based on the percentage of the direct cost is an equitable model; however, there are other options that could be considered. Options might include a flat charge for every assessment and/or referral or a variable contribution from proponents depending on how many referrals/assessments they have previously referred.

Other cost recovery options that have been considered include a charge based on the percentage of the project cost; however, such an approach is not consistent with the Cost Recovery Guidelines, as it would not reflect the cost of providing the service to the private individual. Under such a system, some proponents would underpay for the cost of the service and some would overpay for the cost of the service, leading to cross-subsidisation, which is inequitable. In addition, it is the department’s experience that at the time of submitting a referral, many proponents are not yet able to determine the project cost, and proponents are reluctant to send a signal to the market prior to a decision on whether the action requires further assessment and/or obtains an approval. As such, this option does not appear appropriate. The department is, however, open to other cost recovery options that stakeholders may present.


3.5 What are the costs?

3.5.1 What drives the cost of providing the service?

Based on 11 years of experience administering the EPBC Act the following ‘cost drivers’ have been identified as driving the cost of undertaking an assessment:

Number of controlling provisions

The number of NES triggering the EPBC Act has a direct impact on the resources required to undertake the assessment of the project.

The risk to and extent of potential impacts on matters of NES

The higher the risk or level of impact that a proposal will have on individual matters of NES, the higher the amount of time required to undertake an assessment. For example a proposal that may result in temporary modification to the values of a National Heritage Place will generally be less costly to the department than a proposal that will result in permanent damage to a value of a National Heritage Place.

The requirement to undertake a ‘whole of environment’ assessment

While in most cases the assessment of a proposal focuses on the impact on defined matters, there are some cases where the assessment must consider the impact of the action on all aspects of the environment. This is relevant where an activity is proposed that may impact on Commonwealth land or the environment of the Commonwealth marine area, or where the proposed activity is a nuclear action. Such a broad assessment takes more staff time.

Complexity of assessment and certainty of impacts

A more complex assessment takes more staff time, and potentially the commissioning of specialist external consultants to ensure a rigorous assessment. Complexity is driven by:

The level of availability of relevant environmental data for the project area The understanding of likely impacts from the proposal on matters of NES, and

whether any management or mitigation strategies proposed are well defined and proven

The definition of project scope at the outset of an assessment. Frequently projects are referred which are still in the design phase, and therefore there may be a number of options that a proponent is assessing. The more options that the department needs to assess, the more staff time is required to review documentation and provide feedback.

Number of project components

Projects referred under the EPBC Act vary in magnitude. The more ‘components’ to a project, the more staff time will be required to assess the project. For example the assessment of a rail line is likely to require less time to assess than the assessment of a rail line that is connected to a new mine and a new port facility.


Coordination with other legislation

The department has established bilateral agreements with all states and territories that allow an accredited state/territory process to be used for the Commonwealth’s purposes in taking a decision on approval under the EPBC Act. Where a bilateral agreement cannot apply to an assessment, the department undertakes to streamline the assessment requirements under the EPBC Act with the state requirements (for example, using the same assessment guidelines, the same environmental impact statement, the same public comment periods, etc). While this provides a service to the proponent by reducing duplication and reducing the complexity of public engagement, it increases the level of engagement the department has with the state/territory, and therefore increases costs. The department undertakes similar coordination where a project is being assessed by the Commonwealth under another piece of legislation, such as the Environment Protection (Sea Dumping) Act 1981, the Airports Act 1996 or the Great Barrier Reef Marine Park Act 1975.

Post-approval requirements

The extent of departmental input to the conditions of approval on a project will directly drive staff time. Conditions reflect commitments that a proponent makes to avoid, mitigate or offset the impacts of an action. In many assessments, the proponent is unable to finalise some of their commitments, particularly where engineering designs are still being refined, but require the project to be approved before they can make final investment decisions or obtain financial backing. They may also need to commence a component of the action in order to finalise the management mechanisms, or determine that the management measures are appropriate.

In such cases – where the Minister is satisfied that sufficient certainty exists to determine that the action will be acceptable – the Minister may require that a management plan be prepared as a condition of approval to meet an objective to avoid, mitigate or offset the impacts of an action. This requires a departmental investment of time to assess management plans following the approval decision.

3.5.2 What is included in the cost of providing a service?

The cost of undertaking an environment impact assessment primarily consists of a direct cost and a technical and operational cost. These costs are commensurate with the effort and costs involved in providing the service. Where government agrees to cost recovery of an activity, the activity would not also be subject to government funding. These arrangements would be documented in a Cost Recovery Impact Statement (CRIS). A business improvement charge is also proposed to fund specific reforms to the wildlife trade regulation system, and is described in detail below.


Direct costs

Direct costs are those costs that can directly and unequivocally be attributed to a product. For environment impact assessments this ‘product’ is a specific project assessment. The costs include the staff time of project officers, managers and senior officials, including the Delegate of the Minister. The cost of each member of staff also includes a component of accommodation and property expenses, IT costs and human resources support.

Technical and operational costs essential to delivering assessment services

Technical and operational costs are those costs for departmental services that are not directly attributable to a product but are still essential to delivering a service. These are often referred to as indirect costs or overheads. For environmental impact assessments, these technical and operational costs include business systems to manage information and statutory requirements, appropriately qualified people to provide legislative support, and a small section of staff dedicated to the preparation of species-specific referral guidelines. These functions are essential to deliver robust, legally valid decisions for all referrals and assessments under the EPBC Act and as such these technical and operational costs are included in the cost of each referral and assessment activity.

Business improvement charge

A business improvement charge is also included in the proposed charging model. This business improvement charge will directly support the implementation of reforms to the EPBC Act that will streamline processes relevant to environmental impact assessment, making it more efficient and transparent while enhancing community involvement. Funding reform in this manner is considered appropriate because it is the proponents of projects under the EPBC Act who will directly benefit from improvements to the EIA system over time.

The business improvement charge is payable on the basis of a percentage of the total assessment fee, and therefore the investment by a proponent into future improvements to the EIA system is commensurate with the level of regulatory service that the department provides to the proponent. This consultation paper proposes a business improvement charge of 10 per cent of the total direct cost; however, the department is open to stakeholder views on this level of payment, as well alternative charging models as discussed in section 3.4. The size of the business improvement payment will directly determine the pace with which the department can deliver the reforms to the EPBC Act.


3.5.3 What is the cost of providing the service & how will fees be determined?

Tables 3.1 and 3.2 outline the proposed charging model for each environmental impact assessment activity that is being considered for cost recovery under the EPBC Act. The following descriptions provide an overview of the activities, the estimated charges and the points at which fees would be charged.

Referral costs

A referral is an initial screening phase for a project and has a statutory timeframe of 20 business days. The level of certainty regarding the impacts of an action on protected matters will influence the staff time required to assess a referral, as will the quality of the information provided to the department. However, the department considers that it is important to set a flat fee for referrals so that proponents are aware of the fees that will apply at the outset of the process. An average cost for assessing a referral has been estimated based on a level of service that is considered appropriate for this initial screening phase. The estimated cost is $7,750, which is described further in Table 3.1.

It should be noted that there is no difference in workload (and therefore cost) driven by the decision at the end of the referral process. This is because, regardless of whether the proposal is determined to be a controlled action or a not controlled action, the same requirements must be fulfilled to make a legally valid decision.

Fee point: Fees would be payable as part of validation of the referral (that is, before the 20 business day statutory timeframe can start)

Assessment costs

Assessment by preliminary documentation, environmental impact statement and under a bilateral agreement or accredited assessment process

Based on the department’s experience administering these functions, it is not possible to determine a ‘one size fits all’ approach for determining the cost of these assessment processes. Section 3.5.1 described the range of different ‘cost drivers’ for environmental impact assessments. The cost of assessing a project where the scope of the project is well defined, the management measures proven and the risk to matters of NES are moderate is going to be less than a project which is yet to determine engineering methods, has not developed management measures and has a high risk to matters of NES. The latter project will require additional review and feedback on assessment documentation, more frequent and detailed discussions with proponents and will require more time investment by senior staff to monitor the project, provide input on complex components and engage in higher-level discussions with the proponent.

Therefore, the cost of undertaking an assessment comprises the “base level cost” of undertaking an assessment process, combined with additional costs that are driven by the number and complexity of cost drivers.

Table 3.2 outlines a method of determining additional costs based on this level of complexity. Note that Table 3.2 applies regardless of the assessment level that is determined; however, it would be


expected that the lower level of assessment (that is, preliminary documentation) would have lower complexity and therefore lower additional cost than a higher level of assessment (for example, environmental impact statement).

Fee point: Fees would be determined at the time of making the ‘controlled action’ decision, but would not all be payable up front. Fee points would be selected based on statutory decision points (for example, for an environmental impact statement (EIS) this would be the issuance of guidelines, direction to publish the Draft EIS, receipt of the final EIS, development of a draft approval decision). At each fee point, the proponent would be responsible for paying the fee that correlates to the next stage of the assessment process – for example, in order for the Minister to issue the guidelines for an EIS, the proponent must have paid the fee relevant to the assessment process up until the direction to publish the Draft EIS).

Assessment by a joint assessment panel or public inquiry

The specific assessment process for a public inquiry, or the new joint assessment panel arrangement would be directly related to the project that is being assessed, and therefore the costs would need to be determined on a case-by-case basis taking into consideration the specific cost drivers, which would determine the scope and scale of the terms of reference and potentially the size and expertise of the Panel and the extent of independent expert advice required. The role of hearings during the assessment process would also need to be determined, as well as the location(s) of hearings and necessary travel budget to conduct and support hearings. The division of costs between the jurisdictions involved in the Joint Assessment Panel would also need to be determined.

This variation in costs, combined with the fact that neither assessment process has been used to date, indicates that the cost of delivering these services should be determined on a case by case basis. The cost of the process would be determined at the time the controlled action decision is made; however, there would likely be some additional costs that may arise during the process if, for example, public hearings are required to be more extensive and therefore more costly than anticipated at the outset of an assessment.

It is estimated that the costs associated with a joint assessment panel or public inquiry would be upwards of $500,000.

Fee point: Fees would be payable at specific statutory points during the assessment process, and would be required prior to the next stage of the assessment process commencing.

Approval on referral information

This new faster assessment process requires experienced staff working on the project full time in order to deliver a fast, robust and legally valid decision within the statutory timeframe. The process also requires substantial oversight and direction from senior staff and departmental Executive to ensure that appropriate early guidance is provided to the proponent in the pre-referral stage in order to achieve an acceptable outcome.

Only projects that are of a low complexity and are likely to impact on a limited number of protected matters will be eligible to enter this process. As such, cost drivers are less important for this process.


The cost is instead calculated based on the duration that staff will be required to work on the project full time during the pre-referral and subsequent assessment time. The cost is estimated to be $89,000, and is described further in Table 3.1.

Should complexity arise, or additional matters be identified during the assessment process—particularly following public review of the documentation, the most likely outcome would be a decision that the action requires further assessment under a standard assessment process. The cost of undertaking this standard assessment process would be determined in the same manner as any other assessment following a decision on referral.

Fee point: Fees would be payable as part of validation of the referral (that is, before the 35 business day statutory timeframe can commence, but after the initial project discussions have been held with the proponent and it has been determined that the project is potentially eligible for the approval on referral information process)

Additional costs related to information quality and project changes

There are additional costs that may arise where information quality is not adequate to assess the project, or where project changes occur. In these cases additional departmental staff time being required to address these issues, resulting in additional costs. The cost of these activities is included separately, as many referrals and assessments do not require these activities to occur, as proponents have thoroughly prepared the required information, have clearly defined management procedures, and a clear project design and scope. Proponents who do not create this additional workload should not pay the costs associated with such activities. The estimated costs for these additional services are outlined in Table 3.1.

Fee point: For project changes, fees would be payable as part of making an application for a project change (for example, variation or reconsideration request). For information requests by the department, fees would be payable at the time the proponent submits the requested information.

Post-approval monitoring

The management of post-approval requirements is one of the biggest resourcing issues facing the department, as the increasing number of project approvals over the life of the EPBC Act must be managed. Cost recovery also sends an important pricing signal to proponents regarding the need to make commitments regarding management objectives and environmental outcomes during the assessment process, and provide the opportunity for public input into this assessment process.

Post-approval monitoring has different cost drivers to an assessment process.

Cost drivers include:

the complexity of the conditions of approval the number of management plans that are required to be approved following the approval

decision, the complexity of each management plan and the level of information within the management plans that is of relevance to matters protected under the EPBC Act


the number of environmental offsets and the security of the offsets (environmental offsets can be defined as measures taken to compensate for proposals where the environmental impacts cannot be adequately reduced through avoidance or mitigation)

the certainty with which impacts will be managed. Where management measures are unproven or where project scope is still being finalised, the department will need to spend more time ensuring that impacts are managed in accordance with the conditions

the quality of an audit report submitted as a condition of approval. Where an audit report is developed by an independent auditor, this will require less oversight. Where the department has reason to believe that the audit report does not identify all the issues, a site visit may be required to verify certain elements of the project, which increases costs

the consistency of the conditions with state/territory requirements. Where conditions are consistent and there is adequate state/territory oversight of the project, the time required by the Commonwealth to monitor the project is significantly reduced

the amount of support required by a proponent. Some proponents do not notify the department upon commencement of the action or at specific points identified within conditions, requiring departmental staff to spend more time monitoring the proponent to ensure notifications arrive

The environmental record of the proponent. Where a proponent has previously demonstrated compliance-related issues, the department typically spends more time directly engaging with the proponent to ensure compliance.

Generally, costs are reduced where a proponent has determined during the assessment process specifically how the action will be managed (reducing the need for management plans to be approved following an approval decision) and where a proponent ensures that plans and reports address the requirements of the approval conditions and are submitted in a timely manner.

An annual ‘monitoring’ fee (estimated at $5,500, and described further in Table 3.1) is proposed to apply annually over the life of the approval. This fee would resource the department to review annual audit reports submitted by the proponent, and also fund the department’s audit program. While not all proponents are audited, the audit program selects a cross section of approved projects to demonstrate compliance with the Act, and is a requirement of the Australian National Audit Office (ANAO). The annual fee could be payable at the time of submitting an annual audit report, which may be incorporated as a standard condition of approval.

A fee for the initial review of management plans (estimated at $4,000, and described further in Table 3.1) is also proposed. Some approvals currently managed by the department have upwards of 40 management and monitoring plans, which require considerable servicing throughout the approval life. An additional fee for variation of management plans will also apply, noting that the department is presently preparing guidance for proponents to reduce the number of management plan variations that are required.

Fee point: The first year’s monitoring fee, together with any fees associated with management plans would be payable within 20 business days of receiving a final approval decision for a project. It is proposed that the Minister will be able to suspend an approval if the relevant fees are not received. Subsequent annual monitoring fees are proposed to be payable at the time of submitting an annual audit report.


3.5.4 Potential charging model for full cost recovery

The costs presented in the tables below have been estimated based on a combination of historical data, as well as focus groups comprising experienced case officers within the department. These focus groups examined a small number of case study projects that were considered to represent ‘best practice’, and featured early engagement with proponents, timely servicing of the project, liaison with the proponent throughout the assessment period and met all statutory timeframes. More detailed costing analysis will be undertaken over the coming months to refine the costing model, and this will be informed by stakeholder views on the costing methodology.

The estimated basic costs (refer Table 3.1) are based on the estimated resources required to deliver each respective activity. The estimated additional complexity costs (refer Table 3.2) are commensurate with the additional effort and therefore costs that are required to deliver activities of a higher complexity.

Under this proposed costing methodology, proponents can reduce the cost of their assessment by providing more information upfront at the time of submitting their referral, thereby reducing the complexity of the assessment and the amount of time departmental officers require to assess the project. Activities that avoid or minimise the potential impacts on matters of national environmental significance are also likely to be lower cost as a higher level of certainty around impacts and a reduced scale of impact will result in a lower level of assessment complexity.

Two examples have been prepared to outline how this proposed fee structure could apply to a project of moderate complexity and a project high complexity. These examples also outline the estimated departmental resources required to deliver the activity, which correspond to the estimated costs. A summary of these examples is outlined following the below cost tables, and is described in detail at Appendix C.

Table 3.1 – Estimated costs of EIA components for full cost recovery

Activity

Estimated technical

and operational

costs

Proposed business

improvement charge

Estimated direct costs

Estimated total feeEstimated basic cost

Estimated additional

complexity cost(A) (B) (C) (D) (E) (B) + (C) + (D) + (E)

Referral $750 N/A $7,000 N/A $7,750

Assessment

Preliminary documentation $12,000 0.1 x (D+E) $10,000 Refer Table 3.2 (B) + (C) + (D) + (E)

Environmental impact statement

$12,000 0.1 x (D+E) $30,000 Refer Table 3.2 (B) + (C) + (D) + (E)

Bilateral agreement/accredited assessment

$12,000 0.1 x (D+E) $25,000 Refer Table 3.2 (B) + (C) + (D) + (E)

Joint assessment panel

Costs determined on a case-by-case basis

Public inquiry Costs determined on a case-by-case basis


Activity

Estimated technical

and operational

costs

Proposed business

improvement charge





Approval on referral information $12,000 $7,000 $70,000 N/A $89,000

Post-approval fees

Annual monitoring fee (paid annually for the duration of the approval)

$1,000 N/A $4,500 N/A $5,500

Management plan assessment fee (per management plan)

$1,000 N/A $3,000 N/A $4,000

Additional fees associated with information quality and project changesAdditional fees associated with referrals

Request additional information

N/A N/A $2,500 N/A $2,500

Variation of a ‘particular manner’

N/A N/A $1,000 N/A $1,000

Reconsideration request from the proponent

$750 N/A $7,000 N/A $7,750

Additional fees associated with assessments

Request additional information (during approval timeframe)

$5,000 N/A $12,500 N/A $17,500

Additional fees associated with approvals

Variation of a management plan under conditions of approval

$1,000 N/A $3,000 N/A $4,000

Variation of conditions

N/A N/A $3,000 N/A $3,000


.


3.6 Questions for stakeholders—environmental impact assessments

The purpose of this paper is to gain stakeholder feedback on cost recovery mechanisms. The following questions are designed to assist stakeholders in providing feedback to the department. These questions are not exhaustive, and feedback on other aspects is welcome.

What are the implications of cost recovery for you and/or your business?

What are your views on the full cost recovery model proposed for environmental impact assessments?

How could the complexity matrix (refer Table 3.2) be refined or improved to provide greater certainty in determining upfront costs for your project?

What other cost recovery arrangements should government consider in order to share the costs of environmental impact assessment equitably between stakeholders, and progress reform of the EPBC Act?

What reforms/streamlining efforts would you be willing to pay extra for in the short term in order to gain a benefit in the long term?

In what circumstances should fees for environmental impact assessments be waived or reduced?

What mechanisms and/or fee review requirements do you consider necessary to ensure that cost recovery charges are transparent and equitable?

What service level standards do you consider appropriate for the department to meet under a cost recovery arrangements?


Examples for estimated costs of environment impact assessment

To provide stakeholders with some context of the how the proposed fee structure may translate into real world costs, indicative examples have been developed for a high complexity project (mine, port and rail development), and a moderate complexity project (residential development). The examples are based on the estimated costs outlined in the fee schedule and additional complexity matrix, as shown in Tables 3.1 and 3.2, respectively. These examples are outlined in detail at Appendix C.

Activity

Estimated technical

and operational

costs

Proposed business

improvement charge





Mine, port and rail development—to be assessed by environmental impact statement

$12,000 0.1 x (D + E)= $37,000 $30,000 $340,000 $419,000

Residential development—to be assessed by preliminary documentation

$12,000 0.1 x (D + E)= $6,800 $10,000 $58,000 $86,800

4 Wildlife trade regulation

Regulation of international movement of wildlife specimens under Part 13A of the EPBC Act.

4.1 What’s involved in this function?

Regulation of international movement (exports and imports) of wildlife and wildlife products is an important element of effective nature conservation. In addition to protecting native species, the Australian Government upholds its international obligations, including regulating trade in those species identified under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

International movement of wildlife and wildlife products is regulated under Part 13A of the EPBC Act for all wildlife, including cetaceans. The Act regulates the:

export of Australian native species other than those identified as exempt export and import of species that are listed under CITES import of live plants and animals.

Commercial export of regulated wildlife and wildlife products may occur only where the specimens have been derived from an approved source, which may be a captive breeding program, artificial propagation program, aquaculture program, wildlife trade management operation, or activities undertaken under an approved wildlife management plan (noting that different requirements apply depending on the listing status of the species under CITES and under the EPBC Act).

The import of live plants and animals (both commercial and non-commercial) is only permitted if they are on the live import list. Specimens on Part 1 of the live import list do not require a wildlife trade permit, while specimens on Part 2 do require a permit.

Regulated wildlife may also be exported or imported if it is for an eligible non-commercial purpose. Eligible non-commercial purposes include research, education, exhibition, conservation breeding or propagation, a household pet, a personal item or for a travelling exhibition. Strict conditions must be met to qualify as one of these eligible purposes. There is also provision within the EPBC Act to account for exceptional circumstances, where the import or export of a product does not meet these eligibility criteria, such as for animal welfare purposes.

Wildlife trade regulation can be categorised into the following activity types:

Single use (which may or may not include a facility assessment for welfare purposes) Multiple use (which may or may not include a facility assessment for welfare purposes) Pre-CITES certificates/certificates of origin Wildlife trade operations Captive breeding programs and artificial propagation programs Ambassador agreements Approved aquaculture programs Approved wildlife trade management plans


44.1

4.1.1 Wildlife trade permit process

Several components of the wildlife trade regulatory function currently cost recover; however, these fees have not increased since the Wildlife Protection (Regulation of Exports and Imports) Act 1982 was subsumed by the EPBC Act in 2001, and in some cases have not increased since 1993.

The key steps in the application, assessment and decision-making process for wildlife trade permits is shown in Figure 4.1. Currently, a decision to issue or refuse a permit must be made within the statutory timeframe of 40 business days. Where sufficient information is not provided at the time of making a permit application, the statutory timeframe stops while the information is requested, and the 40 business day timeframe applies from the point that all necessary information is received.

Figure 4.1 – Overview of the standard wildlife trade permits assessment process under the EPBC Act

4.1.2 Who is regulated?

Stakeholders in wildlife trade regulation activities vary greatly in size and purpose. Applicants can range from individuals and small family businesses, to medium sized retailers and large multinational enterprises. There is no one clear category of applicant for wildlife trade permits.

There are also a range of government-based stakeholders in wildlife trade regulation activities. Existing cost recovery arrangements for wildlife trade permits currently exclude cost recovery from government entities. As outlined in section 2.5.1, however, the department will explore the


Application received (with payment)

Application assessed

Permit granted and applicant notified

Copy of permit returned for Acquittal

Audit

Permit refused and applicant notified

potential for government charging to ensure equity in the funding model and avoid industry cross-subsidisation of services to government clients.

4.2 What are the reforms to wildlife trade regulation under the EPBC Act?

As part of the review of the EPBC Act the Australian Government has committed to streamlining processes for the wildlife permits function. This is in its early stages and consultation with affected stakeholders will be an important part of developing a new process that can deliver a faster, more efficient regulatory environment, while maintaining the government’s international obligations and biodiversity conservation objectives.

A recent review of cost recovery for wildlife trade permits indicated that most components of the permitting function are substantially under-recovering the cost of delivering the service. There are a number of contributing factors to this situation, including the fact that the fees were in place prior to the government developing a clear cost recovery policy, as well as the fact that fees have largely remained unchanged for more than 18 years while the rest of the system has changed substantially.

The department appreciates that there is a strong push from affected stakeholders to reform the wildlife permit system; however, this reform cannot be delivered without changing the cost recovery arrangements to cover the cost of the department providing the regulatory service. The department is open to stakeholder views on alternative cost recovery arrangements, noting that alternative arrangements would be subject to a decision by government.

Specific reforms that are proposed for wildlife trade permits regulation are:


Improved service delivery and shorter timeframes

While most applications are processed within the statutory timeframe, it is recognised that for many businesses this is still insufficient as the 40 business day statutory timeframe is an impediment to effective trade in some specimens and products (for example, live specimens and consumables) and not always compatible with the management practices of today’s businesses.

Cost recovery will enable the department to improve service delivery where costs for delivering these services are recovered, as the cost for the service is a direct reflection of the amount of staff time and other resources that are invested in the decision making process.

The department is seeking views from stakeholders on ‘service level standards’ that the department could consider introducing to ensure that the level of service is transparent, and applicants can incorporate these service standards into their planning (for example, the timeframe for review of facility assessment documentation, etc).

Improved business systems

An improved business system will provide better support for all the functions of wildlife trade permitting. Improvements for applicants will include:

- online submission of permit applications, as well as online payment services of fees. Online submissions will improve the consistency and completeness of data received in applications, reducing the time taken to



assess permits and the delays caused by further information requirements

- reduced processing times for permit applications, including improved tracking of work and statutory timeframes and reduced administrative processing to enable the statutory ‘clock’ to start as soon as a complete application is lodged electronically

- the ability to track application progress online, and monitor the status of assessment, approval and acquittal requirements

- assistance with compliance requirements through automated reminders for permit acquittal requirements, and electronic lodgement of acquittal requirements.

Following implementation, these reforms will result in greater efficiency, shorter processing times and a future reduction in fees comparable with the reduced workload for the department.

Streamlined assessments

Options for accreditation will also be examined to potentially remove the need for wildlife trade operators to apply separately to the department for a permit. Under an accreditation scheme, an accredited operation may be permitted to export without the need for permits (non-CITES specimens only). This shift from an individual permitting system to the assessment and accreditation of management arrangements for companies and/or industry sectors would remove the costs and timeframes associated with individual permit applications (where applicable).

The different categories of sources of wildlife and wildlife products that can be approved for international trade will also be reviewed and consolidated, subject to meeting requirements under Australia’s international obligations, including CITES. This work will be integrated with the shift towards accrediting management arrangements for companies and/or industry sectors and will result in a simplified application process for applicants, which is likely to reduce the timeframe required for assessment of individual permit applications.

4.3 Why is cost recovery appropriate for wildlife trade regulation?

The Government’s Cost Recovery Guidelines outline the process undertaken to determine whether a function is appropriate to cost recover. An analysis undertaken by the department determined that wildlife trade regulation activities are appropriate to cost recover, as the process delivers a direct benefit to an applicant without delivering a ‘free ride’ to other parties, charges would be consistent with policy goals, and charging is expected to be efficient and effective. Further detail is contained in the decision tree at Appendix A .

The department has also examined some other wildlife regulation functions which are undertaken as a result of applications by private individuals, but are currently not subject to cost recovery. The


following activities have been determined appropriate for investigation for new cost recovery arrangements:

Pre-CITES certificates and certificates of origin—These certificates offer a clear advantage to the individual/organisation organising the certificate, and would be equitable and efficient to cost recover.

Captive breeding programs, artificial propagation programs and approved aquaculture programs—The number and size of these programs mean they would be efficient to cost recover, while the commercial and personal benefits would make it inequitable for these services to remain at no charge while the rest of the wildlife trade industry moves to a full cost recovery regime.

Wildlife trade operations—Applications for a wildlife trade operation (WTO) that are sought by an individual are also considered appropriate to cost recover (that is, not an application from a state, territory or organization on behalf of multiple individuals). An approved WTO delivers a private benefit to individual applicants and there is no ‘free ride’ to other individuals or industries as the WTO applies to the applicant’s operation only. The exception to this is WTOs related to commercial fisheries of non-CITES specimens, because a WTO applies to an entire fishery and results in the fishery being listed on the List of Exempt Native Specimens (or LENS), precluding the need for other individuals to apply for a WTO. For this reason, WTOs for non-CITES commercial fish specimens are considered outside the scope of cost recovery (see Appendix B complete list of activities out of scope for cost recovery).

Several activities have also been determined inappropriate to cost recover:

Applications to amend the List of Exempt Native Specimens and the Live Imports List—Both of these lists enable the movement of specimens for export and import, respectively. The amendment of these lists creates a ‘free ride’ effect for other private individuals, as once a species is on one of the lists subsequent applicants do not need apply to amend the list. As such, cost recovery of these functions does not appear to be appropriate under the Australian Government Cost Recovery Guidelines.

Ambassador agreements3—Generally, these agreements are obtained in conjunction with a single or multiple use native species permit and these permits may also include a facility assessment. No additional fee is considered appropriate to cover the cost of the issuing the ambassador agreement.

Approved wildlife trade management plans—These plans are generally developed and implemented by states and territories. Charging state and territory governments may have adverse policy outcomes as it could have the effect of discouraging states and territories from developing state-wide plans, which deliver a conservation benefit.

3 An agreement between the exporter, importer and the department about the treatment anddisposal of the animal and any progeny of the animal.



There are existing cost recovery arrangements in place for some wildlife trade permits. Under the existing arrangements, cost recovery from other government agencies is expressly excluded, and the fees have not been changed since 1993. As noted in section 4.2, a recent review of the department’s cost recovery arrangements determined that under the existing fee arrangements for wildlife trade permits there is substantial under-recovery.

Full cost recovery

The department considers that the preferable option for delivering reforms to wildlife trade regulation under the EPBC Act is to move to full cost recovery consistent with the Australian Government’s Cost Recovery Guidelines. Full cost recovery would represent an increase in fees for some applicants. The implementation of full cost recovery would enable improved processing of permit applications. Cost recovery would also facilitate streamlining the wildlife trade permits function, leading to more significant reductions in processing times in the future.

The department also considers that a business improvement charge, based on a percentage of the total permit fee, is a potential efficient and effective mechanism to fund some or all of the reforms to the Wildlife trade permits 4.2. The combination of a full cost recovery fee for service and a business improvement charge would result in an immediate improvement to the service the department provides, and provide a mechanism for the users of the system to contribute to the funding of reforms relevant to wildlife trade regulation in an equitable manner based on their demand on the department’s resources.

Without the business improvement charge, implementation of reforms would be slower, as the department’s resources to introduce reforms would be limited to the department’s budgetary capacity.

Partial cost recovery

An alternative option is partial cost recovery for wildlife trade functions. The current fee arrangements for wildlife trade permits and facility assessments represent partial cost recovery, which is resulting in considerable budget funding being required to deliver these services. As stated earlier in the paper, the continued requirement for budget funding to deliver these services does not provide sufficient resources to invest in reform of the system and the introduction of new efficiencies. Under the Australian Government Cost Recovery Guidelines, partial cost recovery is generally not appropriate, and requires the express endorsement of the Minister for Finance and Deregulation. The department is open to stakeholder views on alternative cost recovery arrangements, noting that alternative arrangements would be subject to a decision by government.


4.24.3


4.44.5

4.5.1 What drives the cost of providing the service?

Applications for wildlife trade permits and associated regulatory activities under the EPBC Act vary in complexity and processing time, both of which impact on the cost of the service. Based on more than 20 years experience administering wildlife trade regulatory functions the following factors have been identified as driving the cost of undertaking an assessment.

Complexity of the application

A more complex application requires more staff time to undertake the assessment. Complexity is driven by:

the level of liaison required with the applicant, states and CITES management authorities in overseas countries

Whether adequate supporting documentation has been provided

any precedents to the application (for example, a repeat applicant with a wildlife trade business that is understood by the department, a species or specimen that is frequently imported/exported)

the need for a welfare assessment (also known as a facilities assessment, which includes assessment of welfare and containment requirements for the species).

Number of species per application

The number of species on the one application directly impacts on the staff time required to process and assess the application.

4.5.2 What is included in the cost of providing a service?

The cost of undertaking the wildlife trade regulation activities under the EPBC Act primarily consists of a direct cost and a technical and operational cost. These costs are commensurate with the effort and costs involved in providing the service. Where government agrees to cost recovery of an activity, the activity would not also be subject to government funding. These arrangements would be documented in a Cost Recovery Impact Statement (CRIS). A business improvement charge is also proposed to fund specific reforms to the wildlife trade regulation system, and is described in detail below.


Direct costs

Direct costs are those costs that can directly and unequivocally be attributed to a product. For wildlife trade assessments, this ‘product’ is the assessment of a specific wildlife trade application. These costs include the staff time required to assess and process permit applications, including that of project officers, managers and senior officials. The cost of each member of staff also includes a component of accommodation and property expenses, IT costs and human resources support.

Technical and operational costs essential to delivering assessment services

Technical and operational costs are those costs for departmental services that are not directly attributable to a product but are still essential to delivering a service. These are often referred to as indirect costs or overheads. For wildlife trade assessment functions, these technical and operational include business systems to manage information, appropriately qualified people to provide legislative support and the security water-marked paper on which permits are printed. These functions are essential to deliver robust, legally valid decisions for all wildlife trade regulatory activities under the EPBC Act and as such these technical and operational costs are included in the cost of each wildlife trade activity proposed for cost recovery.

Business improvement charge

A business improvement charge is also included in the proposed charging model. This business improvement charge will directly support the development and implementation of reforms to the EPBC Act that will improve the business systems that support wildlife trade regulation and develop the new streamlining processes that will reduce the time taken to issue permits and therefore reduce the cost of permits in the future. Funding reform in this manner is considered appropriate because it is the applicants of wildlife trade regulatory activities who will directly benefit from the specific improvements to the regulatory system that will be funded by this payment.

The business improvement charge is payable on the basis of a percentage of the total fee, and therefore the investment by a proponent into future improvements to the wildlife trade assessment system is commensurate with the level of regulatory service that the department provides to the proponent. This consultation paper proposes a business improvement charge of 10 per cent of the total direct cost; however, the department is open to stakeholder views on this level of payment, as well alternative charging models as discussed in section 4.4. The size of the business improvement charge will directly determine the pace with which the department can deliver the reforms to the EPBC Act.

4.5.3 What is the cost of providing the service and how will fees be determined?

Section 4.5.1 outlined the range of factors that drive complexity of permit applications. Many of these factors are difficult to predict, however, and therefore it can often be difficult ahead of receiving an application to determine what complexities will arise in assessing an application. The


department considers that it is essential that an applicant know the cost of applying for a permit ahead of submitting an application, and therefore the cost of providing the service has been determined based on the average amount of time an application will take to progress. Further insight from stakeholders on this cost recovery model and other models that may better accommodate the variation in complexity would be welcome.

The estimated direct cost of undertaking wildlife trade regulation activities are described below. Table 4.1 contains a list of direct costs, technical and operational costs and the proposed business improvement fee associated with each of these activities. The following descriptions provide an overview of the activities, the estimated charges and the points at which fees would be charged.

Single use permits

The average single use permit is estimated to take approximately one hour of staff time to assess and process (estimated at $60), with a portion of additional time required based on the number of species that are required to be included on the permit (estimated at $20 per species). These costs do not vary based on the outcome of the application assessment (that is, if the permit is issued or refused), because the same requirements must be fulfilled to make a legally valid decision.

Fee point: The application fee must be paid at the time of making an application.

Multiple use permits

Applications for multiple use permits are estimated to take the same amount of time to process and assess as applications for single use permits. Multiple use permits for CITES-listed species are issued for a maximum of six months; however, multiple use permits for native species can be issued for a period of up to three years. For permits of longer than six months, an additional charge would apply to cover the cost of monitoring specimen export records, which are required to be submitted by the permit holder on a regular basis. It is estimated that this monitoring takes approximately one hour of staff time every six months ($60).

As such, the total fee for a multiple use permit is the direct cost component fee (estimated at $60), with an additional charge of $60 for each additional six-monthly internals for which the permit is required (up to a maximum of three years).

Fee point: The application fee, including the additional payment where a permit is sought for longer than six months, must be paid at the time of making an application. If a permit is refused, this additional payment will be refunded.

Facility assessment

Facility assessments are required where the department determines that a welfare assessment is required prior to issuing a permit for the live import/export of the species. Where the facility receiving the species has been the subject of a recent facility assessment by the department, a new facility assessment may not be required. It is estimated that one day of staff time is required to undertake this facility assessment ($500).


Fee point: The facility assessment fee should be paid at the time of making an application based on the applicant’s self-assessment of whether it is required. Where the department determines that a facility assessment is required after an application is received, the statutory clock on the assessment will stop pending receipt of the payment and the information required to undertake the facility assessment.

Personal Baggage Permits

Personal baggage permits are most commonly obtained by retailers of wildlife products to include with the sale of goods that include CITES-listed species. The possession of a personal baggage permit make it easy for an individual to travel to a foreign country without concern that their goods will be seized by the border control personnel. Personal baggage permits are usually applied for in bulk, and take approximately 10 minutes per permit to process ($10/permit).

Fee point: The application fee appropriate for the number of personal baggage permits sought must be paid at the time of making an application.

Pre-CITES certificates/certificates of origin

In order to import or export specimens that were acquired before their listing under the CITES, a pre-CITES certificate from the country of export is required. In order to issue a certificate the department must be satisfied that the specimen was indeed acquired prior to the species being listed under CITES before issuing the certificate. In the event that insufficient information is required, the department may request further information, and this will have additional costs as outlined below.

A certificate of origin is required to import or export specimens of species that are listed on Appendix III of CITES but are from a population that is not listed on CITES.

The time required to assess an application for a pre-CITES certificate or a certificate of origin is approximately the same as that required to assess a single use permit application ($60).

Fee point: The fee should be paid at the time that the application is made for the certificate.

Wildlife trade operations

The assessment of an application for a wildlife trade operation is estimated to take three full days ($1500). The technical and operational cost of assessing these applications is quite high due to the legal support that is often required during the assessment of these applications.

Fee point: The fee should be paid at the time that the application is made for the wildlife trade operation.

Approved captive breeding programs, artificial propagation programs and aquaculture programs

The assessment of an application for an approved captive breeding, artificial propagation or aquaculture program is estimated to take two full days ($1000). The technical and operational cost


of assessing these applications is quite high due to the legal support that is often required during the assessment of these applications.

Fee point: The fee should be paid at the time that the application is made to approve the program.

Additional costs related to information quality and payment failures

The cost to the department increases in some circumstances that are within the applicant’s control. Examples include:

where the information provided with an application is insufficient to make a decision on the application and further information is required. The request for further information will result in the 40 business day statutory timeframe being restarted on receipt of the complete information. While this additional time allows the department time to restart the application process, there is currently no additional fee payable for reviewing the new information and re-examining the information provided by the applicant. It is estimated that this service takes approximately 40 minutes of staff time ($40)

where a variation to a permit is required due to an error in the application. There is currently no charge associated with the work required by the department to review the new information provided, alter the permit and reprint the permit. It is estimated that this service takes approximately 50 minutes of staff time ($50)

where payments made by cheque or credit card fail. Payment failures result in the department needing to follow up the payment with the applicant, which takes staff time. It is estimated that this service takes approximately 40 minutes of staff time ($40)

The department considers that where these costs are incurred, they should be paid by the applicant prior to a decision being made on the permit.

4.5.4 Potential charging model for full cost recovery

The costs presented in the table below have been estimated based on a combination of historical data, as well as focus groups comprising experienced case officers within the department. These focus groups examined a small number of case study projects that were considered to represent ‘best practice’, and featured early engagement with applicants, timely servicing of the application and met all statutory timeframes.

The costs within the table must still be further refined; however, they are included to give stakeholders a sense of the scale of costs that would be required to implement full cost recovery, and demonstrate how the charging model would potentially apply to the various permit types. More detailed costing analysis will be undertaken over the coming months to refine the costing model, and this will be informed by stakeholder views on the costing methodology. All costs are estimated based on the resources required to deliver these activities.

The department recognises that in all cases this represents a significant increase in wildlife trade regulation fees, and fees of this scale may be prohibitive for some industries. The department needs


to know the impact of full cost recovery on businesses, and therefore encourages stakeholders to provide feedback on the impact of these fees on their operation.

Table 4.1 – Potential costs for wildlife trade full cost recovery

Activity

Estimated technical

and operational

costs

Proposed business

improvement charge


Estimated total cost Current

fee

Estimated basic cost


complexity cost

(A) (B) (C) (D) (E) (B) + (C) + (D) + (E)

Single use permits $230 0.1 x (D+E) $60

$20 per taxonomic unit

listed on the permit

B + C + D + E $30

Multiple use permit

$230 0.1 x (D+E) $60

$20 per taxonomic unit

listed on the permit

B + C + D + E(for a permit of

six months duration)

For permits longer than six

months, an additional fee of $60 per six months will

apply (up to a maximum of three years)

$75 per six

months

Facility assessment $2300.1 x D= $50

$500 N/A $780 $150

Personal baggage permits

$2300.1 x D

= $1N/A $10/permit B + C + E

$1 per permit

Pre-CITES certificates/certificates of origin

$230 0.1 x D

= $6$60 N/A $296

No charge

Wildlife trade operations (excluding non-CITES commercial fisheries)

$1,2000.1 x D=$150

$1,500 N/A $2,850No

charge

Approved captive breeding programs, artificial propagation programs and aquaculture

$1,200 0.1 x D=$100

$1000 N/A $2,300 No charge


Activity

Estimated technical

and operational

costs

Proposed business

improvement charge

Estimated direct costsEstimated total cost Current

fee

Estimated basic cost


complexity cost

(A) (B) (C) (D) (E) (B) + (C) + (D) + (E)

programs

Additional fees associated with information quality and payment failures Request additional information

N/A N/A $40 N/A $40No

chargePermit variation request (from the applicant)

N/A N/A $50 N/A $50No

charge

Payment failure N/A N/A $40 N/A $40No

charge

4.6 Questions for stakeholders—wildlife trade regulation


What would be the impact of increasing permit fees to full cost recovery on you and/or your business?

In what circumstances should fees for wildlife trade regulatory activities be waived or reduced?

Under what circumstances would you consider that a full cost recovery arrangement would deliver a benefit to you and your business?

If partial cost recovery was introduced, which aspects of the permit process do you consider should be taxpayer funded, and which are you prepared to pay for?

What other cost recovery arrangements should government consider in order to share the costs of wildlife trade regulation equitably between stakeholders, and progress reform of the EPBC Act?

What reforms/streamlining efforts would you be willing to pay extra for in the short term in order to gain a benefit in the long term?

What concerns, if any, do you have regarding the introduction of additional charges where further information is required during a permit assessment, or where there is a payment failure?

What payment method would you prefer to use (for example, credit card, cheque, EFTPOS, cash, money order)? Would you be willing to pay more for the option to apply and pay online?


What other permit fees do you have to pay for the export/import of wildlife trade products under state/territory government and/or other federal government legislation?

What other permit fees do you have to pay to overseas governments involved in the import or export of the wildlife trade products?

What service level standards do you consider appropriate for the department to meet under a cost recovery arrangements?

4


5 Strategic assessments

Strategic assessments under Chapter 4 (Part 10) of the EPBC Act.

Please note this chapter does not discuss strategic assessment provisions for EPBC Act related to Commonwealth managed fisheries (s147 to s154). This function has been deemed not appropriate for cost recovery. Further detail is contained in Appendix B .

5.1 What’s involved in this function?

The strategic assessment provisions (s146) of the EPBC Act allow for the approval of actions or classes of actions if they are taken in accordance with an endorsed plan, policy or program. Within this context, a strategic assessment is a single process that can address a range of activities (by several proponents) that would otherwise be assessed on a project-by-project basis under standard environmental impact assessment provisions (Part 8) of the Act.

There are a number of advantages for undertaking strategic assessments. Strategic assessments are designed to reduce red tape by considering federal and state environmental concerns in a single assessment process, and give greater upfront clarity to developers, landholders, planners, industry, government and the community.

A strategic assessment may be the most appropriate form of assessment for high growth areas with a large number of projects requiring assessment, or projects involving multiple stakeholders or complex, large-scale actions. There may be other opportunities where a strategic assessment is appropriate—for example, where there is scope for developing regional capability and/or integrating environmental protection with higher level planning. These features differentiate them from the standard project by project environmental impact assessment process.

5.1.1 Strategic assessment process

A strategic assessment is the practice of environmental impact assessment at the planning stage, before details about specific projects and proponents are known. A strategic assessment happens early in the planning process and examines the potential impacts on matters of national environmental significance (NES) of actions which might stem from one or more plan, policy or program.

A request to undertake a strategic assessment may be made by or on behalf of any person responsible for the adoption or implementation of a plan, policy or program, provided that the relevant proponent has administrative responsibilities relating to the proposed policy, plan or program and related actions.

The department provides advice and guidance to proponents throughout key stages of strategic assessment, including preparation of the draft report and terms of reference, which can take into account the governance arrangements to satisfy how the plan, policy or program will operate.


The flow chart in Figure 5.1 outlines the strategic assessment process.

Figure 5.1 – The strategic assessment process

5.1.2 Who is regulated

Strategic assessments are based on a collaborative assessment process between the Australian Government and an appropriate proponent who is undertaking a plan, policy or program. The department anticipates that, at this stage, only larger corporations and government agencies are likely to undertake a strategic assessment and be regulated by this activity. This is due to the nature of strategic assessments which are usually large or involve multiple projects.

To date, strategic assessment proponents have only been state and territory governments. However, proponents could also include local government, urban development industry and mining and resource companies.

5.2 What are the reforms to strategic assessments under the EPBC Act?

A key component of the EPBC Act reform package is to shift approaches to being more preventative, proactive and targeted at a scale where they will be most effective. Strategic assessments are a key component of this reform agenda. Although only seven strategic assessments have been commenced under the EPBC Act, they have already demonstrated efficiencies. A shift to strategic assessments can be largely achieved through enhancement of existing processes, and a suite of relatively small regulatory change is required to effectively implement this approach.


An increase in strategic assessments will result in efficiencies and greater certainty for the community and proponents. The requirement to refer individual projects will be negated for projects captured in the classes of actions approved under strategic assessments, with those classes of actions exempted from the need for individual referral. This streamlined assessment will lead to reduced compliance costs, reduced unnecessary delays and increased certainty for business. For example, the department estimates that through the Melbourne strategic assessment alone, up to 252 referrals are likely to be avoided over a 20 year period, along with significant savings to industry and overall benefits to government.

5.3 Why is cost recovery appropriate for this function?

The Australian Government’s Cost Recovery Guidelines outline the process undertaken to determine whether a function is appropriate to cost recover. Preliminary analysis determined that the strategic assessment process may be appropriate to cost recover.

The strategic assessment process delivers a direct benefit to a proponent through a streamlined and upfront assessment process. Where the proponent of a strategic assessment is a private individual or corporation, the individual or entity derives a commercial benefit from the assessment with no subsequent ‘free rides’ to other parties. For example, where a sole corporation has an area strategically assessed for the purposes of its oil and gas development and future expansions, the corporation is a clear beneficiary of the service and there could be no ‘free rides’ to other parties for an assessment of the same area or project.

Where a state or territory agency is the proponent, decision-making regarding the appropriateness of cost recovery is more complex. Only state/territory governments have been engaged in strategic assessments to date. Strategic assessments fast track and streamline the environmental approval process, which in turn can remove the need for future individual proponents to refer their proposal individually to the Commonwealth. The department considers that state and territory proponents engaging in a strategic assessment directly benefit from higher tax revenues collected as a result of the gains to businesses in their jurisdictions, and a strategic assessment can also provide an effective mechanism to deliver state/territory-based policies. The state/territory also has the option to pass on the cost of strategic assessments by charging fees to end users through existing state/territory planning and environment legislation. The department considers that these factors negate the potential ‘free rider’ effect.

There are also policy imperatives to consider in examining this issue, as the government is committed to more strategic approaches and does not seek to discourage the use of strategic assessments through a cost recovery mechanism.


The government is committed to increasing the use of strategic assessments where appropriate to deliver better outcomes for the environment, as well as providing a reduction in regulatory burden and greater certainty for stakeholders. The department believes that cost recovery of strategic assessments should be included in consultation to allow stakeholders to consider the spectrum of


issues involved to form a view of how strategic assessments might fit into a cost recovery system under the EPBC Act.

The department considers that there may be a number of examples when charging a proponent a fee to undertake a strategic assessment is appropriate. Clear examples may include a private corporation proposing a large scale oil and gas development, or industrial or commercial development. In these cases, charging may be appropriate because there is a clear and identifiable beneficiary of the service provided. In accordance with the Australian Government Cost Recovery Guidelines, the fee charged would only include those costs incurred in undertaking the assessment. If fees were not charged, proponents who would normally be assessed under the environmental impact assessment provisions of the Act may increasingly look to have their activities assessed under a strategic assessment to avoid fees when it may not be appropriate to do so. If all strategic assessments remain budget funded, this could also place the Commonwealth Minister in a difficult position concerning with whom they agree and do not agree to enter into a strategic assessment, as a strategic assessment agreement could set up a perceived advantage to some proponents over others.

Charging a fee for strategic assessments may not be appropriate in all cases. Determining factors of whether charging is appropriate may be dependent on policy objectives, or the proponent involved.

An example of when cost recovery of a strategic assessment may not be appropriate is if a state government proposes an urban expansion to a capital city, which is consistent with the policy objectives of the Australian Government’s affordable housing strategy. In this instance it may be appropriate to fund a strategic assessment from budget funding, as the cost impost of the strategic assessment may have a negative impact on the costs of affordable housing, even though the service provided would contribute significantly towards streamlining housing development and approval.

Table 5.1 illustrates example of cost recovery considerations for strategic assessments.

Table 5.1 – Cost recovery examples for strategic assessmentsProponent Activity Considerations Cost

Recovery?State government

Urban area expansion

This example of a strategic assessment is likely to be primarily in the public interest.

Charging a fee for the strategic assessment may be contrary to the government’s affordable housing strategy.

Strategic assessments are based on cooperation with state and territory governments, charging may inhibit the cooperative process and relationships.

Charging may create a ‘free-rider’ effect, as the state would bear the entire costs of the assessment on behalf of all developers.

No—Taxpayer funded

State corporation (for example, port authority)

Port expansion These corporations are likely to be commercial entities in a potentially competitive environment and are a clear and identifiable beneficiary of the strategic assessment.

Exemption may deliver them a competitive advantage which would be inconsistent with the competitive neutrality policy.

Yes—Fee for service


Proponent Activity Considerations Cost Recovery?

The state corporation may want the option to pay the Australian Government for the service required to undertake the assessment if other strategic assessment resources were not available.

Private individual or corporation

Oil and gas development

Charging does not go against policy goals, and would be efficient and effective.

The corporation is a clear and identifiable beneficiary of the strategic assessment.

The corporation may want the option to pay the Australian Government for the service required to undertake the assessment if other strategic assessment resources were not available.

Yes–Fee for service

5.4.1 Strategic assessment cost recovery model—fee for service

The department envisages that the only model suitable for cost recovery of a strategic assessment of a plan, policy or program would be a fee for service.

The fee for service approach would enable the department to charge a direct fee to the proponent to fully recover all the costs associated with the strategic assessment. Charging a fee for service targets the cost at the proponent who generates the need for the upfront planning and assessment service provided through strategic assessments. This approach is also consistent with the policy rationale for the proposed environmental impact assessment charging model.

Due to the nature of strategic assessments, which involve large and complex projects, the cost of a strategic assessment is generally inconsequential when compared with the project value. For these reasons, this option is considered to be equitable, efficient and would not unduly stifle competition or industry innovation. Costs are easily identifiable for strategic assessments because under the department’s internal structure, a dedicated team assesses the specific project with allocated project resources to deliver the service, such as travel and independent advice costs. There is no cross-subsidisation or resource sharing with other assessment projects.

Where a private proponent is charged a fee for the assessment, the proponent would have the potential to pass on those costs through product or service charges to end users or developers, similar to how overhead and administrative charges may be passed on to consumers or clients. This would also allow the costs to be more equitably shared among individuals or end users that receive a direct benefit from the strategic assessment, and result in an efficient cost recovery process.

In spite of the issues associated with charging a state agency for a strategic assessment, the department does not believe the concept should be fully discounted without stakeholder dialogue. There may be circumstances where a state agency would like to sign up to a strategic assessment agreement with the Commonwealth, but the Commonwealth does not have the resources to deliver this service. In this instance, where the state is willing to pay for the assessment, cost recovery may be appropriate as agreed between both parties.


In the circumstance where a state or territory agency was a proponent under a strategic assessment and cost recovery of the assessment was considered appropriate, the state or territory would also have the potential to pass on those costs to future users or developers who undertake activities within a strategic assessment. Recovery of such costs could potentially be incorporated under relevant state planning or environmental legislation.

5.4.2 Fee points

The steps below show how the fee for service model could operate for strategic assessments:

1. Commencement of strategic assessment—agreement entered into between Australian Government Minister and proponent, including agreement for cost recovery.

2. Provision of Service—Australian Government provides service (environmental assessment) to proponent as prescribed in the terms of reference.

3. Charging administration—Australian Government invoices proponent a fee for service periodically (every six months) for the costs associated with the strategic assessment until project completion.

4. Completion of strategic assessment/future charging—Proponents could choose to pass on the associated cost of a strategic assessment into services they provide that are derived from the strategic assessment.

Post-approval monitoring and audit activities are still a developing area in the context of strategic assessments. The department is committed to ensuring rigour to the environmental approval process, and welcomes the views of stakeholders as to ways in which appropriate arrangements could operate under a cost recovery system for strategic assessments.


The costs of strategic assessments are currently government funded, which limits the opportunities to undertake more or larger strategic assessments. The cost of undertaking a strategic assessment primarily consists of direct costs and technical and operational costs.

Direct costs are those costs that can be directly and unequivocally attributed to a product4. They include labour (including on-costs) and materials used to deliver products. Direct costs for strategic assessments include staff time of project officers, managers and senior officials, as well as the cost of obtaining external advice on specialist matters and travel expenses associated with visiting the project site, proponent and/or other regulators that are involved in the assessment of the project.

Technical and operational costs are those costs that are essential to delivering a service but are not directly attributable to a product. These costs are often referred to as indirect costs or overheads. For strategic assessments, technical and operational costs include business systems to manage information and appropriately qualified people to provide legislative support.

4 Direct costs include departmental services essential to providing the service, including rent, human resources and other staff expenses.


5.5.1 What drives costs?

The resourcing required to complete a strategic assessment may depend on a number of cost drivers, including the complexity or uncertainty of management planning arrangements, size, scale and environmental impacts (for example, matters of NES effected) of the plan, policy or program.

The timeframe for completion of strategic assessments may vary depending on the factors mentioned above. Timeliness of the assessment is highly dependent on the proponent’s responsiveness to request for information from the department and the quality of information provided to allow the Australian Government to satisfy the legislative requirements for a robust assessment process.

Of the two completed strategic assessments, the Melbourne Urban Growth Boundary strategic assessment was completed between March 2009 and February 2010, and the Tasmania Midlands Water Scheme strategic assessment between February 2010 and April 2011. Other strategic assessments are continuing for all other states and the Australian Capital Territory.

5.5.2 What is the cost of providing the service?

Strategic assessments have clearly defined project resources dedicated for each assessment. All costs can be directly and unequivocally attributed to the strategic assessment provided for the benefit of the proponent.

Strategic assessment costs and duration for assessment vary depending on a number of factors, including size, scale and quality of planning. Approximate figures for the Melbourne strategic assessment are $800,000-$1,000,000 for total assessment costs (costs associated with staff costs, travel, administration and independent advice) over a 1.5 year assessment period. This cost is considerably greater when compared with the smaller Tasmania Midlands strategic assessment which cost approximately $200,000–$300,000 (staff labour costs, administration and minor travel), also over a 1.5 year assessment period.


5.6 Questions for stakeholders—strategic assessments


The department is proposing cost recovery as a mechanism to address the increasing resourcing demands on the environmental regulatory system. In what circumstances would cost recovery of a strategic assessment be appropriate, or are there other mechanisms the government should be considering to resource this function?

What cost recovery model do you think is appropriate for strategic assessments?

Given that costs are largely dependent on the time taken by the proponent to develop a plan, policy or program, how could the department develop an upfront estimate to provide better certainty around costs for proponents of strategic assessments?

Given the breadth and scope of stakeholders that can potentially benefit from strategic assessments, how should the cost of environmental regulation should be shared equitably between those stakeholders?

Are there certain activities or stakeholders that would be severely disadvantaged if cost recovery for strategic assessments was introduced? What considerations should be taken into account to waive or reduce fees?

Are there other issues that have not been addressed in the strategic assessments chapter that should be brought to the attention of the government?


Appendix A: EPBC Act Activities considered ‘in scope’ for cost recovery (decision trees)

The following ‘decision trees’ have been prepared based on the Australian Government Cost Recovery Guidelines and the process that is outlined for determining whether an activity is appropriate to cost recover, and the most appropriate cost recovery mechanism.

EPBC Act Activity: ENVIRONMENTAL IMPACT ASSESSMENTS (includes referrals, assessments and post-approval monitoring)

COST RECOVERY CATEGORY - REGISTRATION AND APPROVALS Questions Answer Outcome JustificationQ1—Will other firms be able to free ride on the approval of the first applicant?

Yes Go to Q2

No Go to Q4

There is no 'free rider' effect. Environmental approval is given to a single proponent for the activity they are responsible for. Post-approvals monitoring relates to the specific project that has been approved. The proponent has a direct benefit from receiving legal certainty for the project, a social licence to operate and a commercial gain from receiving their environmental approval.

Q2—Is a levy consistent with policy goals?

Yes Go to Q3

NoGenerally taxpayer funded

Q3—Is a levy efficient and cost effective?

Yes Cost recovery levy

Nogenerally taxpayer funded


Questions Answer Outcome JustificationQ4—Is charging consistent with policy goals?

Yes Go to Q5

Generally yes. • Environment will have the same or better level of protection.• Proponent will get better and faster business certainty as a result of an improved level of service.• A cost recovery fee will signal to users the cost of the resources involved in assessments, and the department will be more appropriately resourced to deliver the service that industry expects as well as meeting statutory timeframes.• A cost recovery fee will also provide an incentive to fully consider the environmental impacts of the proposal upfront, as the complexity of a project is a key driver in increasing the cost of providing the service.

In some cases, there could be perverse outcomes:• Small developments (that is, lower cost and/or lower profit margin) may not be able to pay the full cost of an assessment without compromising the viability of the project. This could result in some developments not going ahead.• Charging fees may also lead to some proponents not referring proposals that may impact on matters protected under the EPBC Act. That is, proponents may risk penalty provisions rather than paying the assessment fees (such a decision is expected to be dependent on the size/cost of assessment compared to the project value). This could lead to a greater risk to the environment.

Charging a proponent for post-approval monitoring is also consistent with policy goals. An identifiable user is creating the need for regulation, and should be accountable for the ongoing service and cost required to manage the requirements of their approval, including the development of any management plans and the submission of annual compliance and monitoring reports.


Q5—Is charging efficient and cost effective?

Yes Cost recovery

Fee for service model is preferred over levy, as the fee for service is directly related to cost to provide the service to the individual proponent, and can be reduced by the proponent providing more information up front, and by designing the project with reduced complexity for the assessment (that is, less environmentally sensitive, which directly reduces the level of service required) and reduced requirements following an approval. Fees can be easily billed to proponents at existing statutory decision points during the assessment and approval process, and during the post-approval monitoring phase.



EPBC Act activity: ENVIRONMENTAL IMPACT ASSESSMENTS (AUDITS)

COST RECOVERY CATEGORY—MONITORING ONGOING COMPLIANCE, AND ALSO INVESTIGATION AND ENFORCEMENT

Questions Answer Outcome JustificationQ1—Is charging consistent with policy goals

Yes Go to Q2

Yes—Charging proponents is consistent with policy goals. The function provides a benefit to all industry. Industry/stakeholders should be accountable for the ongoing service and cost required to ensure appropriate audit arrangements meet legal and environmental requirements of the Act. This is consistent with the environmental impact assessment (EIA) charging model and rationale, in which a component of the annual monitoring fee for post-approvals will fund a percentage of annual audits




Yes - All projects carry some level of risk against the environment, and a fee charging model that is fair and equitable is proposed to manage audits for projects according to risk and appropriate level of service. Higher risk projects are likely to be more resource intensive, but are also likely to have more sophisticated environmental management plans that meet EPBC standards. This is reflected in the proposed cost recovery model, which is efficient and effective.

Under the proposed cost recovery model, a component of the annual monitoring fee will fund the department’s audit program. This is effectively a levy on all proponents with approved projects under the EPBC Act. Stakeholders that interact with the EPBC Act are directly linked to the audit service provided and are identifiable as being subject to levy requirements at the time a project is approved under the EPBC Act.



EPBC Act activity: WILDLIFE TRADE (PERMITS)COST RECOVERY CATEGORY—REGISTRATION AND APPROVALS

Questions Answer Outcome JustificationQ1—Will other firms be able to free ride on the approval of the first applicant?

Yes Go to Q2

No Go to Q4

There is no 'free rider' effect. Environmental approval is given to single proponent for the activity they are responsible for. The proponent has a direct benefit from receiving legal certainty for the project, a social licence to operate and a commercial gain from receiving their environmental approval.

Q2—Is a levy consistent with policy goals?

Yes Go to Q3


Q3—Is a levy efficient and cost effective? Yes Cost

recovery levy

Nogenerally taxpayer funded

Q4—Is charging consistent with policy goals? Yes Go to Q5

Charging is consistent with policy goals. Environment will have the same/better level of protection. Proponent will get better and faster business certainty as a result of an improved level of service. Existing fees have been set on a nominal basis; however, they do not cover the cost of providing the service.



Yes Cost recovery

A fee for service is considered the most efficient system for the recovery of costs. Direct salary and direct on-costs relating to registration and approvals of permits should be recovered, as this charging is already undertaken, it is considered effective. The introduction of additional fees to encourage people to provide the correct information and payment details at the time of application would improve the efficiency of the system.



EPBC Act activity: STRATEGIC ASSESSMENTSCOST RECOVERY CATEGORY—REGISTRATION AND APPROVALS

QuestionsAnswe

r Outcome JustificationQ1—Will other firms be able to free ride on the approval of the first applicant?

Yes Go to Q2

No Go to Q4

The Australian Government gives approval to a single plan, policy or program. The strategic assessment process delivers a direct benefit to a proponent through a streamlined and upfront assessment process. Where a proponent is a private individual or corporation they derive a commercial benefit from the assessment with no subsequent ‘free rides’ to other parties. Where a state/territory agency is the proponent, the appropriateness of cost recovery is more complex. Only state/territory governments have been engaged in strategic assessments to date. Strategic assessments fast track and streamline the environmental approval process, which in turn can remove the need for individual proponents to refer their proposal individually to the Australian Government. However, state and territory proponents would also benefit from higher tax revenues collected as a result of the gains to businesses in their jurisdictions which negates the potential ‘free rider’ effect. Refer to section 5.3 for detailed discussion.

Q2— Is a levy consistent with policy goals?

Yes Go to Q3

No Generally taxpayer funded

Q3— Is a levy efficient and cost effective?



Q4—Is charging consistent with policy goals?

Yes Go to Q5

Charging a fee for this function would share the cost between end users when they are identifiable as benefiting from that service. The department recognises that there is a risk that the introduction of costs for strategic assessments may be contrary to policy goals in some cases, and potentially create a disincentive to undertake them, particularly where a state and territory governments is the proponent, as strategic assessments are based on a collaborative effort from both levels of government. Charging could be seen at odds with the policy objectives of strategic assessments, which are designed to reduce the administrative burden for large-scale environmental approvals, however: environment will have the same/better level of protection, with

greater strategic planning and streamlined approach to approvals only larger and more complex PPPs are likely to be strategically

assessed, which use a significant amount of government resources. The service fee will likely be very small in comparison to project value in most cases, and proposed model provides an opportunity to share the costs of environmental regulation in an efficient and effective manner between end users.



Yes Cost recovery

A fee for service will directly correlate with staffing resources allocated to projects as per Cost Recovery Guidelines. Experience to date has shown that strategic assessment ASL costs and other associated costs would be very small in comparison to projects assessed under a strategic


QuestionsAnswe

r Outcome Justificationassessment. The proposed method of charging (six monthly) will directly recover the exact expenditure and deliver a reduced cost for a more timely assessment. Timeliness is generally determined by the state.



Appendix B: EPBC Act activities considered ‘out of scope’ for cost recovery

Activity Description of activity Reason why cost recovery is not appropriate

Conservation agreements

A conservation agreement is an agreement between the Australian Government Environment Minister and another person for the protection and conservation of biodiversity in an area of land or sea.

Primary beneficiary of this activity is the environment. Activity is public good in nature, and cost recovery is inconsistent with policy objectives.

Bioregional plans Bioregional Plans: The Minister may prepare a plan for a bioregion that is within, or contains, a Commonwealth area. Bioregional plans enable the ecologically sustainable management of biodiversity, heritage and other values.

Primary beneficiary of this activity is the environment and the community. Activity is public good in nature, and cost recovery is inconsistent with policy objectives.

Statutory committees:

- TSSC- BDAC- AHC- IAC

The statutory committees under the EPBC Act advise the Minister on amending and updating lists of matters of national environmental significance (NES), including threatened species, threatened ecological communities, key threatening processes, heritage places or properties, and incorporating Indigenous people’s knowledge of land management and the conservation and sustainable use of biodiversity. The committees undertake assessments of the status of matters of NES and status of relevant lists.


EPBC Act exemptions

The Minister may make a declaration to exempt actions under the EPBC Act. Exemptions may include those that are necessary for Australia's defence or security or in relation to preventing, mitigating or dealing with a national emergency. The Minister is required under the Act to publish all notices of exemption under sections 158 and 303A and the reasons for granting the exemptions.

Exemptions are granted in cases where a public good service is required. Activity benefits the broad community. Cost recovery is inconsistent with policy objectives, inefficient and ineffective.

Species listing and nomination / critical habitat

The EPBC Act protects Australia’s native species and ecological communities by providing for: identification and listing of threatened species

and ecological communities development of conservation advice and

recovery plans for listed species and ecological communities

recognition of key threatening processes and, where appropriate, reducing the impacts of these processes through threat abatement plans

permits to be issued for certain actions involving protected species.



Recovery plans / threat abatement plans / conservation plans / heritage management plans

Recovery plan: The EPBC Act provides for the making or adopting of recovery plans and conservation advices when a species is listed. Recovery plans set out the research and management actions necessary to stop the decline and support the recovery of listed threatened species or threatened ecological communities.

Threat abatement plans: set out the research, management and other actions needed to abate key threatening processes.

Wildlife conservation plans: A wildlife conservation plan sets out the research and management actions necessary to support survival of one or more migratory, marine, conservation dependant or cetacean species listed under the EPBC Act, which are not considered endangered or vulnerable, but would benefit from a nationally coordinated approach to conservation.

Heritage management plans: The Australian Government provides protection under the EPBC Act for world heritage sites and national heritage places. The EPBC Act contains provisions for listing and protecting Commonwealth owned or controlled heritage places. Under the Act the Minister’s approval must be obtained before any action takes place that may have a significant impact on the heritage values of a listed place.

This group of activities primarily benefits the environment or Heritage properties or places, and the community. Activities are public good in nature, and cost recovery is inconsistent with policy objectives.

Access to biological resources

Part 8A of the EPBC Regulations 2000 regulates access to biological resources in Commonwealth areas for the purposes of research and development based on their genetic and biochemical properties.The department issues permits for access to biological resources. The permits cover a range of research topics, some recent examples include: a genetic study of fish and invertebrate

populations to predict the impact of climate change on connections among reef populations

analysis of tissue samples from sea snake and coral species from Ashmore Reef

The Part 8A Regulations also require the development of benefit-sharing arrangements where commercial or potentially commercial research is undertaken on biological resources from Commonwealth areas.

Permits provided to applicants may benefit individual applicants for commercial purposes; however, the provisions establish benefit sharing arrangements with the community and the environment. Cost recovery is considered inconsistent with policy objectives.


Compliance-related activities under Part 17 of the EPBC Act

Investigation of complaints or other allegations of non-compliance, and potential enforcement action against individuals or companies that breach the requirements of the EPBC Act.

Generally not consistent with policy objectives and counterproductive as this function sits within the basic product set of the department. Giving a financial incentive to the department to pursue investigations could impact on the integrity of the regulatory system.

Strategic assessments of Commonwealth fisheries

Under the EPBC Act, the department assesses the environmental performance of management arrangements for fisheries, to ensure that fisheries are managed in an ecologically sustainable way. All Commonwealth-managed fisheries are required to undergo a strategic assessment under Part 10 of the EPBC Act.

Function provides assessment of inter-agency management arrangements. Cost recovery is inconsistent with policy goals, and not expected to be efficient or effective.

Wildlife trade operations for non-CITES commercial fisheries under Part 13A

Australian native wildlife specimen and/or CITES-listed specimens that are exported for commercial purposes must come from an approved program such as a wildlife trade operation. A wildlife trade operation is an operation taking specimens that meets legal requirements, such as a market testing operation, a small-scale operation, a developmental operation, a commercial fishery, a provisional operation or an existing stocks operation.

A wildlife trade operation (WTO) for non-CITES commercial fisheries is relevant to an entire fishery and results in the fishery being listed on the List of Exempt Native Species (or LENS), precluding the need for other individuals to apply for a WTO.

Applications for an approved WTO generally meet the cost recovery criteria where the application is generated by a private individual.

However, the specific provisions of the EPBC Act related to WTOs for non-CITES commercial fisheries result in all operators of a fishery obtaining a benefit from a WTO and the subsequent listing of the fishery on the LENS. Charging for WTOs that apply to non-CITES commercial fisheries would not be efficient or effective, as the department does not have contact with all individual fishers operating within the fishery in order to introduce an equitable fee system (for example, a levy).

Part 13 accreditations for fisheries

In taking a decision on whether to declare a commercial fishery as a wildlife trade operation, the potential impacts of the commercial fishing operation on listed threatened species, migratory species, marine species (and cetaceans) in Commonwealth areas is also considered. Where the Minister is satisfied that all reasonable steps will be taken by those fishing to ensure that members of listed species are not killed or injured as a result of the fishing, and the conservation status of a listed species or a population of the species will not be adversely affected, the Minister accredits the fishery under Part 13 of the Act. This accreditation removes the offence provisions that may otherwise apply regarding listed marine species.

A Part 13 accreditation benefits all individuals operating within a particular fishery, therefore creating a ‘free ride’ to all fishers operating within the fishery. Charging for a Part 13 accreditation would not be efficient or effective, as the department does not have contact with all individual fishers operating within the fishery in order to introduce an equitable fee system (for example, a levy).


Whale sanctuary permits

In the Australian Whale Sanctuary, and for Australian citizens in waters beyond the sanctuary (international or foreign waters), a permit from the Minister is required to injure, take, keep, move, and/or interfere with a cetacean. All applications are posted on the web and public comments are sought as required under the EPBC Act.

Primary beneficiary of this activity is the environment and the community. Only a small number of permits are processed annually. Current fees are modest. Activity is public good in nature, and introduction of full cost recovery would be inefficient and ineffective.


Appendix C: Environmental impact assessment costs for different project complexities

The costs presented in this paper for environmental impact assessments have been estimated based on a combination of corporate history, as well as focus groups comprising experienced case officers within the department. These focus groups examined a small number of case study projects that were considered to represent ‘best practice’, and featured early engagement with proponents, timely servicing of the project and liaison with the proponent throughout the assessment period, and met all statutory timeframes.

1. Stages of the assessment process

The cost of undertaking an assessment has been determined based on the number of days that are required by staff members of different levels to undertake each stage of the assessment process. During the assessment process under the EPBC Act for preliminary documentation, environmental impact statement and bilateral agreement there are typically five stages. These are described as follows:

Stage 1: Determine information requirements/prepare guidelines—Following a decision on the assessment approach, the department will consult internally with specialist areas, as well as other state/territory and Commonwealth agencies as necessary to determine the information that is required to assess the project. Any public comments received on the project will also be taken into consideration in preparing the information required. The information that is requested will form the basis for the assessment, and therefore it is important that the information requested from the proponent gives clear guidance as the specific information required. Liaison with the proponent is also often required to ensure that the information requirements/guidelines are clear prior to issuing the documentation.

Stage 2: Liaison with proponent and other regulators and review of documents throughout the preparation of draft assessment documentation—Following the issuing of guidelines, the proponent will prepare the assessment documentation. Typically, a proponent will consult with the department through the preparation of the documentation, and departmental representatives may visit the project site to understand the context of the project. The department is often requested to review multiple drafts of information that is prepared by the proponent to ensure that the information requirements/guidelines have been met. The department will provide written comments in regard to draft documentation to ensure that there is a record of feedback provided. In many cases components of the draft documentation will also require review by specialist line areas within the department. The department will also consult with relevant state/territory and Commonwealth agencies to ensure that the assessment under the EPBC Act is streamlined as much as possible with any other government processes underway.

Stage 3: Review final assessment documentation—After publication of the draft documentation for public comment the proponent is required to address all comments received. The department must ensure that the proponent adequately addresses all comments received. During this stage of the process, the proponent is often finalising specific management measures that will be undertaken and are therefore likely to form


conditions of approval. As such, the department works closely with the proponent and any state/territory government agencies that have a regulatory role to ensure that the management procedures are likely to be acceptable under the EPBC Act and are consistent with state/territory requirements.

Stage 4: Prepare recommendation report—Following publication of the final assessment documentation the department prepares its recommendation report for the Minister. During this period, the department consolidates all the information on the project in order to ensure that all matters for the Minister’s consideration are clearly outlined so that a legally valid decision is made. The department also consults with internal specialist areas to ensure that conditions are appropriate, and with the department’s audit team to ensure conditions are worded such that they are legally enforceable. The department will also consult with state/territory governments as required to ensure that the specific conditions under the EPBC Act will be consistent with the state requirements.

Stage 5: Prepare draft and final approval decisions—The department will prepare a draft approval decision for exposure to the proponent. The Minister may also choose to publish the draft decision for public comment. The department will liaise with the proponent on the draft conditions to ensure that the requirements of the conditions are understood, and are feasible. In briefing the Minister on the draft and final approval decisions, the department is diligent in ensuring that all the requirements for a legally valid decision are included. Following a decision, the department undertakes to notify the proponent, relevant government agencies and other stakeholders as required of the decision and transfers the project to the post-approval area of the department, ensuring that all post-approval requirements are entered into a database that can track the requirements.


2. Calculation of basic assessment costs

The calculation of the ‘basic cost’ for an assessment has been estimated based on the time taken to assess a project of the lowest complexity. That is, the cost of assessing a project with a low level of complexity across all matters of NES, only one project component, a high level of certainty regarding impacts and management measures and no links to other legislation that need to be managed throughout the assessment period.

The basic cost of a preliminary documentation assessment, environmental impact assessment and an assessment under a bilateral agreement are outlined below. These costs are directly related to the departmental resources that are required to undertake the work. Note that the costs include all staffing overheads (for example, accommodation, IT, corporate expenses, salary and superannuation). The time committed by each staff member is allocated according to the five stages outlined in section 1 of this appendix.

Preliminary documentationEstimated time (days)

Stages of the assessment and approval process Assessment officer

Assistant director

Director Delegate of the Minister

Stage 1: Determine information requirements 2 0.5 0.1 0.03Stage 2: Liaison with proponent and other regulators and review of documents throughout preparation of draft documentation

2 0.5 0.1 0.03

Stage 3: Final documentation 2 0.5 0.1 0.03Stage 4: Preparation of recommendation report 3 1 0.25 0.03Stage 5: Prepare draft and final approval decisions 3 1 0.25 0.03

ESTIMATED TOTAL DIRECT COST $10,000

Environmental impact statement (EIS)Estimated time (days)


Assistant director


Stage 1: Draft guidelines 5 2 0.5 0.03Stage 2: Liaison with proponent and other regulators and review of documents throughout preparation of draft EIS

15 5 2 1

Stage 3: Review final EIS 5 2 0.5 0.27Stage 4: Prepare recommendation report 5 2 1 0.27Stage 5: Prepare draft and final approval decisions 5 2 1 0.13


Bilateral agreementEstimated time (days)


Assistant director


Stage 1: Input into guidelines 5 2 0.5 0.03Stage 2: Liaison with proponent and other 15 5 2 1


regulators and review of documents throughout preparation of draft assessment documentationStage 3: Review final assessment documentation 5 2 0.5 0.27

Stage 4: Review recommendation report 1 0 0 0Stage 5: Prepare draft and final approval decisions 5 2 1 0.13


3. Additional complexity costs

Most controlled actions will have greater complexity than that described by the ‘basic assessment’ criteria, as most projects that are determined controlled action have some level of complexity. As such, additional resources will be required in order to manage the specific elements of complexity. The following examples have been compiled to outline how the fees would be determined, using the assessment costing matrix at Table 3.2.

Example 1—High complexity project: mine, rail and port development

Description of the project: A mine extension, rail line, onshore port development and offshore dredging and jetty construction.

Estimated total fee

Activity

Estimated technical

and operational

costs

Proposed business

improvement charge





Mine, port and rail development—to be assessed by environmental impact statement

$12,000 0.1 x (D + E)= $37,000

$30,000 $340,000 $419,000


Additional complexity components

Project characteristics Additional resources required during the assessment process

Estimated costs

Matters triggered: Three

Threatened species and ecological communities: Land clearance and linear infrastructure are proposed across known habitat for the northern quoll that is important for connectivity.

Migratory species: The port infrastructure is proposed to be constructed over habitat that provides foraging habitat for migratory and threatened marine turtles.

Commonwealth marine area: This project will involve considerable dredging extending into the Commonwealth marine environment. The dredge plume is likely to impact on some coral communities in the Commonwealth marine environment.

Threatened species (high complexity): Assessment officer—24 days Assistant Director—12 days Director—4 days

Migratory species (moderate complexity): Assessment officer—6 days Assistant Director—3 days Director—1 days

Commonwealth marine area (high complexity): Assessment officer—24 days Assistant Director—12 days Director—4 days

$20,000

$5,000

$20,000

Project components: Four (very high complexity) mine rail line onshore infrastructure offshore dredging.

Each additional project component increases the department’s workload by the basic assessment cost (that is, the cost of assessing one project component). Assessment base cost x 3

$90,000

Certainty of impacts: No site surveys undertaken offshore,

some site surveys undertaken along the rail line, but further work is required.

The proponent has proposed broad management measures, but the detail is lacking and they are not enforceable.

The project scope includes some alternative dredging footprints, but these alternatives are clearly defined.

Site surveys (high complexity): Assessment officer—70 days Assistant Director—26 days Director—10 days Delegate of the Minister—3.4 days External expert—$20,000

Management strategies (high complexity): Assessment officer—70 days Assistant Director—26 days Director—10 days Delegate of the Minister—3.4 days External expert—$30,000

Project scope (moderate complexity): Assessment officer—17.5 days Assistant Director—6.5 days Director—2.5 days

$80,000

$80,000

$15,000



Estimated costs

Other legislation: Coordination is required under

section 160 of the EPBC Act to assess the project under the Commonwealth Sea Dumping Act. There is a high level of complexity under the Sea Dumping Act due to the dredge spoil locations and proximity to cold water corals, which are values of the Commonwealth marine environment.

A high level of complexity also exists with the state legislation, due to the need to align the assessment documentation with both state and EPBC Act requirements.

s.160 coordination (high complexity): Assessment officer—16 days Assistant Director—8 days Director—4 days

Other legislation (high complexity): Assessment officer—16 days Assistant Director—8 days Director—4 days

$15,000

$15,000

Estimated total cost $340,000


Example 2—Moderate complexity project: residential development

Description of the project: Residential development, which requires clearing and alteration of water courses in an area that provides important habitat for a threatened frog species.

Estimated total fee

Activity

Estimated technical

and operational

costs

Proposed business

improvement charge





Residential development—to be assessed by preliminary documentation

$12,000 0.1 x (D + E)= $6,800

$10,000 $58,000 $86,800

Additional complexity components


Estimated costs

Matters triggered: One Threatened species and ecological

communities: Land clearance and alteration of water courses in an area of habitat that is of high quality for a threatened frog species.

Threatened species (high complexity): Assessment officer—24 days Assistant Director—12 days Director—4 days

$20,000

Project components: One Land clearing for residential

developmentNo additional cost

Certainty of impacts:

Site surveys for the frog are partially complete. Additional dry season surveys are required.

Clarification is required regarding the proposed management measures.

The project scope is clearly defined.

Site surveys (moderate complexity): Assessment officer—17.5 days Assistant Director—6.5 days Director—2.5 days

Management strategies (moderate complexity): Assessment officer—17.5 days Assistant Director—6.5 days Director—2.5 days

No additional cost

$15,000

$15,000

Other legislation: Coordination not required under

section 160 of the EPBC Act.

There is a moderate level of complexity under the state planning legislation. Liaison will be required to streamline approval conditions.

No coordination required

Other legislation (moderate complexity): Assessment officer—8 days Assistant Director—4 days Director—2 days

$8,000

Estimated total cost $58,000


Documents

Consultation paper on cost recovery under the Environment ...€¦ · Web viewCost recovery arrangements are subject to regular review through a Cost Recovery Impact Statement (CRIS)