Privatising environmental regulation – the Wonthaggi desalination plant and the EPA

Victoria’s Environment Protection Authority (EPA) has barely had a positive word said about it over recent years. Since 2009, particularly following its handling of the landfill gas leak near Cranbourne, it has been criticised by the Victorian Ombudsman, the Auditor-General, and in February 2011 by a consultant commissioned by the agency to review its compliance and enforcement regime. The EPA is nevertheless upbeat about its function, with its Chair commenting: “in the face of criticism over recent years, [the] EPA has committed to re-establishing itself as the State’s environmental regulator”.

Contractual documents relating to the environmental performance of the Wonthaggi desalination plant, however, suggest that the previous Brumby Government was not as confident in the EPA’s ability to monitor the environmental compliance of one of Victoria’s most expensive and controversial projects.

Those documents reveal that the State and the future operators of the desalination plant have negotiated a private, contractual environmental regulatory regime. The regime is similar in structure to the arrangements that the State has with its metropolitan private transport operators. Failure to meet certain standards, in this instance environmental quality standards rather than public transport punctuality targets, is penalised with financial deductions from the monthly operating fee that the State pays for desalinated water.

In some ways this development reflects the current trend towards the privatisation of planning and environmental laws in Victoria. Last week the Minister for Planning was reported to have announced that the Baillieu Government will soon introduce laws that will allow property developers to self-regulate their projects in accordance with a code. This reform suggestion was made concurrently with a proposal that developers also be permitted to perform a role in the amendment of local Council planning schemes.

Under the private, and until recently secret, agreement between the State and the future desalination plant operators, a breach of an EPA operating licence will be subject to a $200,000 fee deduction (rising to $1 million if continuing for 14 days). The deductions are similar in amount to the penalties imposed by the Magistrates Court under the Environment Protection Act 1970 (Vic), but less than the maximum penalties permissible under the Act. For example, the maximum penalty for all but the most severe pollution offences under the Environment Protection Act 1970 (Vic) is $286,680 plus $143,340 for each continuing day (ie rising to a maximum penalty of more than $2.2 million after 14 days).

There is no term in the contract that indicates that this regime replaces or displaces the Environment Protection Act 1970 (Vic). The operator of the desalination plant will still, in theory, be subject to the same environmental laws as everyone else. This is implicit in the contractual term that states that any financial deduction for environmental non-compliance will be offset by any amount of fine or penalty it incurs under the State’s laws.

Further, the language used in the contract does not use the terminology of the Environment Protection Act 1970 (Vic). For instance, the contract refers to notions of ‘environmental harm’ and ‘significant environmental harm’, but these are not standards found in Victoria’s universal environmental criminal law regime. They have been taken from the laws of other States and Territories – including Tasmania, South Australia, Queensland and the Australian Capital Territory.

It is possible, therefore, that breaches of the contract that give rise to financial deductions will not necessarily amount to breaches of Victoria’s environmental laws.

If it proves to be the case that this contract-based environmental law regime is additive to the State’s environmental laws, then it will be an interesting and perhaps innovative evolution in environmental regulation. The concern, however, is that this private regime will not be additive, rather it will in effect replace the State’s universal and transparent criminal environmental law regime for the desalination plant. There is a strong likelihood that the contractual regime will be used in preference to the State’s criminal laws, at least in the first instance, because it will be much easier to administer, will be applied monthly, and it will not threaten ongoing operation of the plant like some of the provisions of the Environment Protection Act 1970 (Vic) allow. Finally, and significantly, this private regime might effectively displace universal criminal laws because the EPA has been so ineffective in enforcing its laws. The contract will give the Victorian Government an opportunity to intervene and penalise the desalination plant operator when the community demands it but when the EPA, as it did with the Shell Refinery in north Geelong, fails to do so.

There are benefits for the operators if this contractual regime becomes the preferred environmental law framework for the desalination plant. There will be no convictions attached to any non-compliance, little or no publication of reports of environmental degradation, no director liabilities for crimes committed, and no need to advertise offences in the paper or support local environmental initiatives (which are currently regularly used sentencing options by the Magistrates Court). There will be no baggage that the operators will be hamstrung by in future. It is also a very clinical and emotionless way to regulate the environment. Simply allow an operator to buy its way out of environmental difficulties.

Of course, irrespective of any arrangement between the previous Government and the future operators of the desalination plant, the EPA will have the power to fine, prosecute and shut down a polluting desalination plant. Whether it uses these powers as a State regular should, or whether persists with its approach of offering warnings and encouragement to industrial polluters, time will tell.

Investing the law with an environmental ethic

New to book stands is a book edited by Erika Techera from Macquarie University titled Environmental Law, Ethics & Governance.

It is available from Inter-Disciplinary Press. I provide a chapter titled: ‘Investing the Law with an Environmental Ethic: Using an Environmental Justice Theory for Change’. The abstract states:

The adoption of the concept and theory of sustainability by domestic law has not garnered an environmental ethic nor resulted in meaningful changes to legal, political, cultural and community institutions. As a consequence, the law remains incapable of attaining environmental improvements for the benefit of humans and other species. Present day environmental law is still primarily concerned with protecting property interests and upholding a narrow view of responsible government. Further, the law still characterises and purports to protect the environment as divisible components. This chapter argues that introducing a broad and multi-faceted theory of environmental justice drawn from environmental philosophy into the law would redress the environmental ethical deficit in the law. In particular, the chapter shows how an environmentally just legal system would be reformed with a focus on environmental assessment, pollution control, and species preservation laws.

Scarcity or plenty in Tasmania’s forests?

I gave this presentation at the Fifteenth Public Law Weekend at the ANU on 3 September. The conference theme was Scarcity, Sustainability and Public Law:

Scarcity or plenty in Tasmania’s forests? A clash of legal and scientific understandings in the Wielangta forest dispute

Tasmanian forestry has been the subject of politicisation and conflict for decades, especially since the mid-1980s after the High Court put a brake on the hydroelectric industrialisation of the state. From then there is a discernible change of conservation attention from rivers to forests. Nationally Tasmanian forestry has been contentious throughout the 1990s and the 2000s.

While most conflict has been centred around the so-called ancient forests in the Florentine, Tarkine, Styx, and Weld, it was only recently that Wielangta was introduced into the fray.

Wielangta is located on the east coast of Tasmania, approximately 50 kilometres north east of Hobart, close to the Triabunna woodchip mill. The forest is accessed from Sorell in the south and Orford in the north. The forest is a mix of dry and wet schlorophyll eucalypt.

Unlike those ancient forests that have acted as rallying points for conservationists, Wielangta has a long history of forestry, dating from the mid to late 1800s and only being gradually displaced by the creation of reserves in the late 1980s. Today, Wielangta comprises distinct pockets of never logged forest, an abundance of old-regrowth forest, ongoing logging coupes and vast areas of cleared land. As a conservation concern Wielangta only rose to attention because of the court cases championed by Senator Brown that we will discuss today.

Senator Brown’s articulated concern was for these three species:

  • the migratory swift parrot, which uses the Wielangta area’s hollowed trees as a preferred nesting and breeding habitat
  • the endemic Tasmanian wedge tailed eagle, which is very low in number and particularly threatened by human activities, like shooting and trapping, and by tall-tree habitat clearance or isolation; and
  • the incredibly rare broad toothed stag beetle, endemic to the local area and a nearby island reserve.

Each species is listed as threatened under the Commonwealth’s Environment Protection and Biodiversity Conservation Act 1999 (commonly known as the EPBC Act). By virtue of their listing under the EPBC Act these species are protected.

More than simply an altruistic attempt to preserve these species, the case was an opportunity for Senator Brown to argue that forestry activities in Tasmania are both environmentally harmful and illegal, and to undermine the protection regime that is so closely linked with resource use. As one of Senator Brown’s advisors noted “Bob wanted to challenge the EPBC Act [and wanted to show that] the 1990s inter-state agreement on forestry had failed to deliver the good outcomes that had been promised”; and as another noted “he wanted to bring about a fight”. It was a strategic, rather than emotive, case and Wielangta was convenient because of the presence of these three threatened species.

The legal issue centred on section 38 of the EPBC Act. That section exempts forestry activities from the Commonwealth’s environmental law that otherwise prohibits actions that are likely to have a significant impact on species protected under the Act. It is a law that is directed at protecting the environment from harm and conserving biological diversity; an object that Australia has international obligations to satisfy.

The exemption exists because forestry activities, management and conservation in a number of states are subject to agreement between the Commonwealth and the States. These Regional Forest Agreements (or RFAs) specify Commonwealth conditions to it forgoing its regulatory involvement in state-sanctioned forestry. The Agreements seek to balance the objects of surety of forest supply, regulatory simplicity, sustainable use of the forest resource, and conservation.

The Regional Forest Agreement and the EPBC Act have vastly different coverage. The Tasmanian Regional Forest Agreement applies to the entire state. It treats the state as one large forest region within which conservation occurs simultaneously with forestry.

By contrast, the EPBC Act only applies to Commonwealth protected areas, like the vast Tasmanian Wilderness World Heritage Area and the Rasmar Convention nominated wetlands of international importance, which are dotted mostly along the coast. The Act, as noted, also applies to species wherever they are located. The conservation focus is therefore narrower in scale.

In this series of cases the most relevant clause of the Tasmanian Regional Forest Agreement was clause 68. This is the clause that specifies how Tasmania will protect designated species in the state, species that include the swift parrot, the Tasmanian wedge tailed eagle and the broad-toothed stag beetle.

In its original form, and the form it was in for the trial, the clause stated in effect that: Tasmania agrees to protect the three species of relevance through a system of reserves or by applying management prescriptions.

The case was, from a legal perspective, rather straightforward. It ought to have been a question of statutory interpretation … of what is meant by s 38 of the EPBC Act? Does the exemption only apply if the RFA protects species? Or is it enough that a reserve system with the intention of conservation has been established? Either way, what is a forestry operation taken in accordance with an RFA?

This, however, was not how the case was run. Aside from the Commonwealth in its role as intervener, the parties saw this case as involving much more than the interpretation of legislation. Indeed, in the trial, the interpretation question was suffocated by the large amount of scientific evidence that was led, particularly by Forestry Tasmania.

One of Senator Brown’s lawyers, noted that Forestry Tasmania could have run a case on s 38, and its lawyers outlined that case in its opening submissions, but instead it quickly got engaged in a “battle of the hearts and minds that logging is a good thing”; that they couldn’t resist responding to the allegation of non-protection of the environment.

This was confirmed by a member of Forestry Tasmania, who told me that: “We needed to say the accusation that ‘you guys endanger species’ is wrong”.

Further, I was told, Forestry Tasmania was not going to concede that it has a significant impact on species under the EPBC Act and then rely on the s 38 exemption in that Act. Moreover, it was going to argue that its management approach did in fact protect species as contemplated by the RFA.

And so the case took on extra meaning to the two sides. And their arguments about the law were based not simply on what the laws meant in a legal sense, particularly drawn from legal tradition of precedent and tools of interpretation aided by scientific understanding. Rather, the scientists framed the laws in light of their views about whether Tasmania’s forests were being managed by foresters in a way to preserve species or whether forestry was further endangering protected species. For instance, two of Senator Brown’s experts articulated concerns about the replaceability of old-growth forests with plantations and the loss of species refuges, while one of Forestry Tasmania’s witnesses noted that the organisation’s research funding improved conservation outcomes.

The starting point for each side was scarcity or plenty. Forestry Tasmania’s scientists went so far as to devise a controversial (and ultimately detrimental) process of scientific peer review of all the science it prepared for the case. It did so in order to ensure coverage: to offer more science than the other side; and depth: to outdo the other side on complexity and detail. To the judge the process appeared a bit like collusion. To Senator Brown’s expert witnesses they saw Forestry Tasmania as getting ‘waylaid on the trivial’. The Forestry Tasmania scientists were very much in control of their organisation’s case.

Both sides presented their own version of what it meant to protect species. Senator Brown’s scientists did so simply and forcefully. Witness evidence was directed and formulaic and less concerned by scientific uncertainty. Witnesses were very much guided by the EPBC Act notion of significant impact, and saw the role of legislation to maintain species; to not allow any activities that would further threaten those species already under threat.

It was an approach to science dismissed by Forestry Tasmania as simplistic, narrow and emotive.

Forestry Tasmania’s view was much more pragmatic and guided by the notion that conservation does not occur in pockets, rather ought be judged across the state. In this instance the State is subject to one RFA that balances conservation and resource use. Forestry Tasmania found it more difficult to position a scientific view within the legal regime because the RFA lacks the legal status of the EPBC Act. In its view, not all places are of equal value – certainly not a long-term logged area; and not all impacts on species threaten the integrity of the ecosystem or population persistence – and these were the test for protection and impact. Forestry Tasmania’s scientists were much more cautious and their witness statements complex and cross-dependent. They read and were presented like scientific papers. The overriding message, while not clear, was that forestry management could and did protect species within a dynamic ecosystem that allowed for the exploitation of plentiful resources.

Justice Marshall made his decision on the basis that the parties wanted. He was asked to determine whose science was right and he chose Senator Brown’s. Threatened species, he concluded, could not be further threatened under the law, which is what forestry activities did.

His decision, very light on legal reasoning, was criticised and overturned by the Full Federal Court based on its interpretation of the statute. The EPBC Act exemption applied, the court said particularly relying on the extrinsic materials that accompanied the inclusion of s 38 in the EPBC Act, if Tasmania had created a series of reserves under the RFA with the intention of preserving species. Unfortunately for Forestry Tasmania, still smarting from the trial decision, the Court declined to revisit the question of what it meant to protect species, and whether Forestry Tasmania was a protector of or threat to endangered species.

In 2007 a varied clause 68 was introduced into the RFA making abundantly clear that the conclusion of the Full Federal Court reflected the parliament’s intention.

It was a move by the executive that frustrated a challenge to the High Court, which gave the impression that it is awaiting a case to comment on the EPBC Act for the first time, and encouraged proposals for legislative reform.

In the end, both sides are claiming victory in the science debate that this case became. Arguably, Forestry Tasmania’s view of the science of forestry and conservation has prevailed on the executive. However, this overlooks the very political nature of the changes made to the RFA, a political and economic interest in perceiving Tasmania’s forests as a plentiful resource, and changes the context that existed when the RFA exemption was included in the EPBC Act. Forestry Tasmania also maintains, in a form of legal revisionism, that Justice Marshall’s findings of fact have been overturned by subsequent events.

Meanwhile, Senator Brown got his finding in the court of the country, not simply in the court of public opinion, that Tasmanian forestry does threaten the environment; that the forests are not plentiful, rather a scarce habitat for endangered species. That the law ultimately proved unhelpful to his cause will likely embolden him and his supporters for reform. You should stay tuned.

Mills, Mines and Other Controversies – including the Channel Deepening Project

I have written further on the Channel Deepening Project and its assessment under the Environment Effects Act 1978 (Vic) in a recently published chapter in a book edited by my colleagues at the ANU College of Law, Tim Bonyhady and Andrew Macintosh.

Mills, Mines and Other Controversies: The Environmental Assessment of Major Projects is published by The Federation Press.

In the Chapter I argue that:

The Channel Deepening Project exposed the weaknesses in Victoria’s EIA laws. In the absence of an adequate legislative structure, the process was mismanaged and manipulated for political purposes. The result was a disjointed and unsatisfactory assessment that cost millions and left many with concerns about the project and its potential impacts on the environment and human health.

At least partly because of the perceived failings of the first EES process for the Channel Deepening Project, the Victorian Government has sought to constrain EIA processes for subsequent projects, particularly the North-South pipeline and the Wonthaggi desalination plant. For the pipeline a type of project assessment was invented and conducted that bore no resemblance to an EIA. In the desalination project, trial works were exempt from assessment and the policy support and need for the plant were specifically excluded from the EES process. The steps the government has taken in these and other projects have limited community involvement and undermined the role of independent adjudicators. Ironically, these aspects of the EIA process did not derail the Channel Deepening Project assessment. They helped to underscore the failings of  parts of the assessment, highlighted faults with aspects of the project, and ultimately led to a more rigorous assessment.

Reform is overdue. No longer should the process be one where proponents and objectors offer themselves to a political game where only the politicians can and do win; and more than occasionally a proponent succeeds, battle-scarred. Changes need to be made to ensure the EIA process meets the commonly agreed objectives of rigour, transparency, fairness and participation.

The introduction of the EPBC Act has not raised the standard of EIA in Victoria. On the contrary, the Commonwealth’s role has been used as a credential for the Victorian Government’s assessment approach, thereby further stalling reform. Moreover, the EPBC Act has offered misplaced hope to community opponents who do not appreciate its limits. This has resulted in litigation that has drained community resources for little public benefit.

What’s an encumbrance? Environmental justice? Emission standards?

I contributed to Oxford’s Australian Law Dictionary, edited by Trischa Mann. My contributions will mostly be found among the ‘e’ for ‘environment’ entries. Here is my pre-edited entry for ‘environmental justice’, the theoretical foundation for my current research:

Arising from the United States in the 1980s, the environmental justice movement argued against environmental discrimination: principally the siting of environmentally harmful industry in poorer, black and immigrant communities.

The movement articulated a principle of environment justice: that people should have equal access to environmental goods (like parks and clean water) and share the burden of environmental bads (like landfills and polluting activities).

This principle of environmental justice has since been broadened, and for the purpose of the law now encompasses rights of participation and access to justice in environmental decisions and public interest environmental justice now also extends to theories of ecological justice, which consider non-human parts of the environmental court proceedings. The principle of environment as having rights that should be protected for the environment’s sake and not just because of human interest and utility in the environment.

Avoiding regulatory responsibility for the Great Barrier Reef

In a recent article Professor Donald Rothwell and I critique a judgment of the Australian Administrative Appeals Tribunal and discuss the consequences of uncertain marine park boundaries on the regulation of Australia’s most celebrated and threatened World Heritage Area: the Great Barrier Reef in northern Queensland. The impetus for the court case and the subject matter of the article appeared in the first instance trivial – a complaint by an island resident against a seaplane operation. However, the complaint demonstrated the failure of the existing legal structures to consider environmental effects of a marine or above water activity experienced on land. It also highlighted the ineffectiveness of government agencies to co-ordinate assessment of a proposal requiring approval in a way that ensured the requirements of various laws were met.

In our article we also analyse the law of marine boundaries in Australia and highlight deficiencies in the analysis of the tribunal and the lawyers representing the Great Barrier Reef Marine Park Authority.

The article is titled ‘The limits of the Great Barrier Reef Marine Park: Defining bays and redefining regulatory control’ and has been published in volume 37 of the Federal Law Review.

Victorian environmental assessment laws failing

Arising from the environmental assessment conference I issued this media release. I commented that:

“Victorian environmental assessment is entirely dependent on guidelines, there is almost nothing in legislation”  … “Because of this, the Minister for Planning can use or ignore the guidelines to suit his needs. Other States also have disappointing laws around environmental assessment, but the fact their laws are detailed puts them one step ahead of Victoria.

“The current assessment approach has failed, the Government said so when it was elected, and the Channel Deepening Project illustrated that. But many of the mistakes that were made in that process haven’t been learnt from and are now being replicated with the North-South Pipeline and Wonthaggi Desalination Plant assessments. The fast-tracking of those projects does not respond to the causes of the delays for the Channel Deepening Project and does not recognise the positives from the process.”

The media release was picked up by The Age.