EPBC Act Cost Recovery Consultation

31 October 2011

Ms Vicki Middleton

EPBC Act Cost Recovery Consultation

EPBC Reform Taskforce

Department of Sustainability, Environment, Water, Population and Communities

GPO Box 787

CANBERRA ACT 2601

Dear Ms Middleton,

Consultation Paper on Cost Recovery Under the Environmental Protection and Biodiversity Conservation Act 1999

Ports Australia welcomes and appreciates the opportunity to comment on the Consultation Paper on Cost Recovery Under the Environmental Protection and Biodiversity Conservation Act 1999.

Ports Australia

Ports Australia is the peak industry body representing all port authorities and corporations, both publicly and privately owned, at the national level. The submission is made on behalf of the members of Ports Australia all of whom are listed on our website at www.portsaustralia.com.au.

General Comments

We fully support the Department’s need to share the costs of environmental impact assessment between proponents and the Department. The proposed mechanism outlined in the consultation paper promises improved service delivery, faster assessments, more guidance and better cooperation between departments (both Commonwealth and State). Unfortunately, the required level of detail as to how these aims might be achieved and to what extent they will be implemented, is missing from the paper. We need to understand in greater detail exactly what increased value or better outcomes proponents would see as a result of the fees they would incur under this or any other cost recovery arrangement. In general, proponents need to see much improved performance, before any cost recovery measures can be supported.

We cannot support the full cost recovery model proposed for EIAs. The estimated costs of assessment for the full range of EIA components set out in Tables 3.1 and 3.2 are significant and not always commensurate with the actual risk or complexity of the referred project (please see the Estimated Costs of Referrals below). In general, these costs do not appear to be shared, but are entirely shifted from the Department to proponents.

Specific Comments

Referral Fee

Under the proposed full cost recovery mechanism, the fixed cost to refer a project of $7,750 is payable up front irrespective of whether the project is determined to be a controlled or non-controlled action. This is a contentious issue for us given that it is a flat fee irrespective of the scale of the project and its associated environmental impact and the level of assessment. Perhaps a better model might be one that is based upon the required amount of time spent on the referral by SEWPaC. Another way of costing this fee could be to have a minimum fee that would be levied if the project were found to be not a controlled action. The fee would be increased if further assessment determined that the project was a controlled action.

Already we have heard views expressed by potential proponents that $7,750 is a sufficient deterrent for companies to refuse to refer projects. Such actions will only cause the Department additional problems.

However, the fee should only be levied once the promised improved guidelines and new tools to support self- assessment by proponents have been produced. Without this guidance material and tools, proponents will be forced to continue to refer unnecessary projects to the Department for assessment (and subsequently incur this substantial fee). The self-assessment tools referred to broadly in the paper need to be produced before any cost recovery mechanisms are introduced so that proponents have specific evidence of improved performance.

There is no undertaking to improve the statutory time frames. This is an issue that has been raised consistently with SEWPaC officers at Ports Australia’s Environment Working Group meetings. Cost recovery cannot be supported until statutory time frames are met.

We also believe that it would be beneficial to have a resource (or more than one depending on the level of infrastructure development in a region) dedicated to specific regions (eg the Pilbara or tropical Qld coast) so that those people become familiar with all of the EIAs undertaken in the area and develop a good understanding of what has been done in the past so that proponents can be guided as to likely impacts. The WA EPA commits this resource and their EIA assessment officers provide a good level of service through a single contact point. That person has a high level of knowledge of the region and they don’t request assessments of matters not present in the area.

Assessment on Referral Information

The paper postulates a new Assessment on Referral Information (ARI) process which will only be applicable when the “complexity of the process is low and the impact 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”. Does the Department envisage that any port projects would fall into this process? We note that the estimated cost for such a referral to be $89,000. This might encourage piece-meal referrals but a 35 day process would provide much needed certainty for proponents.

Post Approval Fees

The paper states that an annual monitoring fee of $5,500 is required from the date that approval has been granted.

This date may not always align closely with the actual commencement of the approved works. Ports and other proponents have considerable experience with time lags between obtaining approvals under the EPBC Act and the actual commencement of work. Projects have been delayed due to a range of circumstances eg delays with sourcing project funding or simply due to the fact that the project approval is sought early in the planning phases. Is it the Department’s intention to still charge the fees despite the fact that the project has not commenced? We suggest that the Department give consideration to exemptions or alternatives to Annual Monitoring Fees for those projects that have been approved but not yet substantially commenced.

Unfortunately, this fee is not related to any performance benchmarks from the Department and proponents would be paying the fee but not getting any value from the costs incurred. Post approval fees are not supported.

Coordination with State and Territory Departments

Ports would like to see a stronger commitment by both state, territory and commonwealth regulators to improving coordination and integration on EIS assessments to align the processes between the regulators. Too often lip-service is paid to alignment with other jurisdictions. Strong leadership from the Department will be required to deliver on this commitment.

We would also appreciate advice from the Department on progress with the commitment from the COAG meeting held on 19 August at which the new National Reform Agenda for Environmental Regulation was minuted as follows - “COAG has agreed on the need for major reform of environmental regulation across all levels of government to reduce regulatory burden and duplication of business and to deliver better environmental outcomes, including through greater use of regional planning and strategic assessments. To this end, a cross jurisdictional working group of senior officials is to develop options and implementation arrangements for this reform agenda. The working group will report to COAG….at its first meeting in 2012”.

How will industry input to this process be invited and managed?

Business Improvement Charge

We do not accept the suggestion that a Business Improvement Charge be levied on top of the cost recovery fees. The detail provided in the paper is scant at best and industry will need considerably more information before this charge can be supported. We fear that this may be double-dipping on top of the newly introduced fees. Surely cost recovery alone would accommodate the objective outlined under the Business Improvement Charge?

Potential for Double Dipping with Sea Dumping Permits and GBRMPA Permits

How will the cost recovery process envisaged for EPBC referrals impact upon fees already levied for Sea Dumping Permits and GBRMPA permits? Are these not potentially examples of double dipping given that the EPBC implications are assessed through the Sea Dumping and GBRMPA processes?

Review of Cost Recovery Arrangements

We support a regular review of cost recovery arrangements through a Cost Recovery Impact Statement (CRIS).

Estimated Costs of Referrals

At our request, several ports have provided breakdowns of the additional costs they would incur under the Department’s proposed model.

Estimated Costs of a Referral for the Port of Dampier - MOF Road Widening Project

In 2010, the MOF Road Widening project was referred to DEWHA (1M road shoulder sealing project through National Heritage Listed Place, on pre-existing disturbed land only). The Department also assessed this project as “Not a Controlled Action (Particular Manner Approval)”. The total costs for the DPA to gain State (Native Vegetation Clearing Permit) and Federal (EPBC – Aboriginal Heritage Survey) approvals for this project was in the order of $12,000.

Under the proposed cost recovery model for environmental impact assessment Dampier Port Authority would be charged $21,000 to assess this project - an increase of almost 90% to the total project approvals costs.

A breakdown of the estimated costs under the relevant Environmental Impact Assessment components is provided below:

·  Referral $ 7,750

·  Request Additional Information $ 2,500

·  Annual Monitoring Fee (2 year period) $11,000

·  TOTAL $21,250

The costs for assessment of both of the above projects under the proposed Full Cost Recovery are significant in the context of: (1) the total dollar value of the project approvals; (2) the risk and complexity of the projects and their assessment, and; (3) the final assessment decision - “Not a Controlled Action (Particular Manner Approval)”.

To put these dollar values into perspective, if the Department were charging out their staff at a rate of $1,000 per day then this equates to one SEWPaC staff member working full time on the EIA for the MOF Road Project for four and a half weeks over the life of the project

This example highlights the inflated costs being incurred by proponents under the proposed full cost recovery mechanism.

Port of Townsville

Estimates provided by Townsville for pre-project work for initial port expansion engineering and environmental investigations eg establishing relevant footprint, concept design, dredge volume assessment) – $2.5 million.

Port Expansion EIS – $ 3.6 million

Submission fees paid to date

-  Significant project status (State) $27,500

-  Coordinator general (State) $150,000

-  GBRMPA (Cth) $100,000

Known future costs

-  GBRMPA (Cth) $100,000

-  State approvals under the planning approval - around $40,000 - $60,000

Proposed costs under EPBC referral – the port’s assessment of the likely costs is both subjective and optimistic and assumes that the port expansion project incorporating the 6 berths and channel deepening is one project.

Using Table 3.1 the cost of an EIS would be $12,000 (B) + 0.1x$290,000 (D+E) + $30,000 (D) +

$260,000 = $331,000 for the application.

In addition, there is the $4,000 fee for any Management plan, plus $1,000 for any modifications (and as the port is staging the EIS it could be open for 20 - 30 years and there will be a number of modifications to comply with the port’s ISO14001 best practice commitment).

PLUS the $5,500 annual review cost for the time the project remains open which in this case may be 20 - 30 years so this could be up to $165,000.

In summary:

EIS research

-  Townsville’s commitment to date for the EIS and investigation for the project - $6.1 million (excluding supplementary EIS)

Current assessment fees (State and Cth)

-  $437,500

Additional fees for EPBC cost recovery

-  $331,000 – assuming no information requests, variations or additional information so realistically add another $60,000 for information requests, etc

Supplementary EIS

-  Unknown but significant

Potential ongoing fees (State)

-  IDAS costs annual renewal ($14,084 at most assuming >1 million tonnes of dredging)

Potential ongoing fees (EPBC)

-  $5,500 best case and probably up to$20,000 worst case (if we need to modify or resubmit management plans between each of the 4 stages which may have a few years gap)

Townsville therefore estimates that the additional burden of cost recovery under the EPBC Act will double the current application costs pushing them close to $1 million in total for a relatively small EIS. This is in addition to the already substantial costs incurred with undertaking a sound and robust EIS.

The paper does not recognise the financial burden already carried by proponents in the preparation of documents prior to the referral and assessment stages. Recognition by the Department of this commitment would be an appropriate acknowledgement of the commitment already made by proponents.

We are aware that members of Ports Australia will be making their own submissions with their own estimates of costs that are likely to be incurred under the proposed cost recovery model.

Conclusion

Ports Australia has been sympathetic of the burden placed on the Department. Indeed, we wrote to both Minister Garrett (in 2010) and Minister Burke (in 2011) expressing our concern at delays with assessing approvals and noting that this situation would only worsen with the increasing number, size and complexity of infrastructure projects in the pipeline including new berths, terminal expansions and, importantly, capital and maintenance dredging projects. We noted the excellent relations that exist between ports and officers within the Ports and Marine Section and acknowledged that their workload was unlikely to diminish in the coming months and years. We want to ensure that the Section continues to have appropriately qualified people who are able to respond to approvals in a timely and efficient manner. We supported the provision of additional qualified resources to enable the Section to better respond to the increasing number and complexity of permissions that will require assessment from the burgeoning ports sector and the pressure of increasing trade.

The cost recovery model will place significantly more pressure on the Department to deliver outcomes in a timely manner. Whilst Ports Australia supports the principle of cost recovery, the focus should be on achieving best environmental outcomes, rather than on purely recouping administrative costs.

We trust that any cost recovery fees levied by the Department would be quarantined to ensure that they are used to improve EPBC referral and assessment processes and not form part of Government consolidated revenue.