Reform Wave to Wash Away Blockages to Major Australian Project Development Assessments

by K&L Gates LLP

Following on from our 'Open for Business – a Reform Wave to Hit the Australian Resources Sector' Legal Insight in October 2013, the Productivity Commission has released its final report on Major Project Development Assessment Processes (Report).

The Report was commissioned by the Commonwealth Government in December 2012 to benchmark Australia's major project development assessment processes against international best practice. The government at the time rightly acknowledged that the development of major projects will be an important part of the ongoing economic development of the nation and that all governments in Australia should strive towards international best practice to attract necessary foreign capital.

The Report has noted that there is substantial scope to comprehensively overhaul Australia's regulatory framework for development assessment and approval (DAA) and a number of leading practices have been identified to be implemented by all Australian governments.

In particular, the Productivity Commission has identified the following areas within Australia's DAA regime which require attention:

  • regulatory outcomes falling short of their objectives and conflicting policy objectives
  • unnecessary complexity and duplicative processes
  • lack of regulatory certainty and transparency in decision making
  • lengthy approval timeframes
  • inadequate consultation and enforcement.

While a complete list of the recommendations made in the Report can be found here on page 31, specific tangible reforms proposed include the following:

  • Strategic assessments – rather than evaluating one project at a time, the cumulative impacts that arise from multiple projects within a single geographic area should be assessed. This can result in subsequent projects' DAAs being less resource intensive and time consuming, since the issues have already been identified.
  • Major project coordination office (MPCO) – have each state and territory establish an MPCO for large scale developments to:
    • advise proponents on their statutory requirements
    • coordinate the DAA process
    • electronically track and progress against agreed timelines.
  • One stop shop for environmental approvals – a plan to move towards a 'one project, one assessment, one decision' framework for environmental approvals that includes:
    • devolving power to states and territories by increasing the number of state and territory DAA procedures with accreditation by the Commonwealth
    • strengthening state and territory approval and enforcement processes
    • starting accreditation for less environmentally sensitive areas and if appropriate, having state and territories accredit the Commonwealth for more environmentally sensitive areas
    • directing the Council of Australian Governments (COAG) to publish and report against a timetable of these reforms.
  • Increased use of statutory timeframes – governments should use statutory timeframes to increase timeliness, transparency and certainty to project proponents in various DAA processes.
  • Limiting the use of stop the clock provisions – the ability of regulators to stop the clock on statutory time periods should only be available where matters emerge that were not in the terms of reference for review, or were not reasonably anticipated and where the reasons for doing so are disclosed.
  • Separating politics from regulations – like Western Australia and Tasmania, all jurisdictions should pursue the institutional separation of environmental assessment/enforcement functions from policy functions. The Report noted that this will promote public confidence, competitive neutrality and impartiality in DAA procedures.
  • Decreased use of merits review – enshrining the principle that Ministerial approval should not be reviewable by review bodies other than on judicial review grounds (except in cases where a primary DAA decision is not made by a Minister).
  • Better targeting of approval conditions – reducing unnecessary compliance costs and improve outcomes by:
    • refraining from imposing conditions where legislation already exists to achieve an outcome
    • undertaking public consultation on the assessment agency's draft recommendation
    • publishing all conditions with an explanation as to how they mitigate a risk
    • providing scope to remove, alter or add conditions where a strong case exists.
  • Improving third party opportunity for compliance actions – where not already done so, all jurisdictions to legislate to enable third parties to bring enforcement cases on primary approvals to courts or tribunals.

The Report notes that these reforms need to be comprehensive rather than piecemeal as a regulatory system 'is only as good as its weakest link' and that a formal implementation strategy is needed. COAG has already indicated its willingness to act on these recommendations in its endorsement on 13 December 2013 for 'one stop shops' for environmental approvals.

We will keep you updated of ongoing developments as this reform wave gathers pace.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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