The Commonwealth environmental impact assessment (EIA) process, aimed at protecting matters of national environmental significance (NES), has been ineffective at improving environmental outcomes and duplicates state-based regimes, according to a recent report.

The report, entitled The EPBC Survey: Preliminary Data Report, has been produced by Andrew Macintosh of the Australian National University's Australian Centre for Environmental Law. It details the results of a survey of projects referred to the Commonwealth EIA process under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

The report's release coincides with an independent review of the EPBC Act which is currently under way. The review, headed by Dr Allan Hawke, is looking at the effectiveness of the EPBC Act (including the EIA process) as well as the appropriateness of the current matters of NES.

According to Macintosh, one of the survey's key findings is that while there appears to be, overall, an over-referral of projects to the EIA process, the projects that cause the most environmental harm are not necessarily being captured.

Under the EPBC Act, a project must be referred to the Minister for the Environment, Heritage and the Arts (Minister) for approval under the EIA process if it will, or is likely to have, a "significant impact" on a matter of NES. NES matters include important heritage sites, Commonwealth marine areas, and endangered species and ecological communities. The Minister will then decide whether the project requires approval (a controlled action), or whether assessment and approval is unnecessary (not a controlled action).

The survey found that overall there is a large over-referral of projects, with the vast majority of referred projects being deemed by the Minister not to be controlled actions. Of the 3105 projects referred since the EPBC Act came into force almost nine years ago, 2369 (76 per cent) were determined not to be controlled actions. "So more than 70 per cent of the projects that are referred ... go straight in and out the other side," Macintosh explains.

However, despite this trend towards over-referral, the report found that a large number of projects that do result in significant environmental degradation are not being referred under the scheme.

In particular, the report notes, only 22 agricultural-related land clearing projects have ever been referred under the scheme (just 0.7 per cent of all referrals), and just three of these were deemed controlled actions. These 22 projects involved no more than 12,100 hectares of native vegetation, and the three controlled action projects involved just 1650 hectares. Yet, during the period the scheme has been in operation, at least three million hectares of vegetation has been cleared nationally for agricultural purposes.

Freehills partner Peter Briggs believes that the under-representation of land clearing projects being referred to the EIA process is "troubling". He said the problem could potentially be the fact that land clearing itself isn't listed as a matter of NES under the EPBC Act, so land clearing projects might genuinely be falling outside the ambit of the EIA process.

"I think [the gap in land clearing referrals] should be looked at and ... perhaps we need to think about whether land clearing can legally be, and should be, one of the triggers to Commonwealth assessment," he says. "It's possible that we have a whole lot of land clearing happening, potentially with national implications ... because it will have implications for our carbon footprint, for water, for soil - for things not just within a state boundary.

"And I think that's one of the real issues here - I think there is a real role for the Commonwealth to help protect and assess impact on the environment over the whole continent [in a way that] state laws simply can't do," he says.

The absence of land clearing as a matter of NES has also been flagged as an issue under the current EPBC Act review. An interim report released in July stated: "A significant number of submissions argued that land clearance should be included as a matter of NES under the [EPBC Act]. Some of these submissions noted the significant threat to biodiversity posed by land clearance, as well as the risks of increasing salinity and declining water quality. Submissions also noted the greenhouse gas emissions and potential climate change impacts caused by land clearance."

However, Briggs also notes the possibility of non compliance as a reason for the limited number of land clearing referrals, combined with ineffective enforcement of the offences under the EPBC Act. "Are people not being prosecuted for land clearing? Maybe they should be referring them but they aren't," he suggests.

Macintosh believes that this over-referral of some projects on the one hand, and under-referral of land clearing projects on the other, could be the result of uncertainty surrounding the test for when a project needs to be referred. "The test is: 'likely to have a significant impact', so it's really uncertain and nebulous and people struggle with it," he says.

However, Briggs doesn't agree that the test is necessarily unclear. "I think it's true that it's seen as something that clients struggle with. But in my practical experience it's not usually an issue if the clients get proper advice from the right experts at the right time," he says. "So it's really a matter of - at an early stage in the project development - getting some legal advice about how to structure things and getting some technical advice about some of the potential triggers under the Commonwealth act."

Allens Arthur Robinson partner Bill McCredie agrees. "The position is normally quite clear [in terms of] whether something will or will not require referral. It's a question of fact. I think when the [EPBC Act] first came in there was quite a bit of uncertainty about how the test should be applied, but I think, with the experience of proponents now, there is very little doubt as to whether something should be referred or not," he says.

He adds that having a project declared not to be a controlled action isn't necessarily considered a waste of time by proponents. "It simply gives comfort to the proponent that they can then go ahead without being potentially exposed to offences under the [EPBC Act]," he says.

Another of the report's findings, Macintosh says, is that because of the nature of projects that are being referred, many are being subjected to overlapping state and federal compliance obligations.

The report found that the majority of the projects being referred, and then subjected to the EIA process, were residential developments (25 per cent), and major oil, gas and mining projects (22 per cent) - sectors already subject to significant regulation under state and territory environment and planning laws.

The report notes: "Due to the nature of the activities which are being captured by the EIA regime, there are concerns about the overlap with other regulatory processes and the potential for inefficient duplication of the regulatory effort."

Comments from the survey's respondents also back up this finding. When asked how the EIA process could be improved, 66 proponents individually commented on the need to remove regulatory duplication and better integrate state/territory and Commonwealth processes.

In an effort to minimise regulatory duplication, bilateral assessment agreements now exist between the Commonwealth and all states and territories - meaning project proponents are required to produce only one environmental impact statement which will be relied on for approval under both Commonwealth and state environmental assessment regimes.

However, while this system minimises duplication to an extent, projects are still required to get two sets of approvals, often with conditions attached to each.

Allens' McCredie points out that these conditions often overlap, and are sometimes inconsistent. "I think that's an area where there is concern. There's certainly a need for integrating the administrative cultures in the state and Commonwealth environmental regulators. The bilateral agreements give a framework for that assessment process, but when you get down to negotiating conditions you don't necessarily have both Commonwealth and state regulators in the room," he says. "That creates concern for proponents because there may be different standards of performance that are required by the states and the Commonwealth."

The survey also found that project proponents don't believe the EIA process is resulting in improved environmental outcomes. Sixty two per cent of respondents reported that the process did not improve the environment outcome of their project, while 14 per cent claimed it made the outcome worse. Only 11 per cent of respondents said the process resulted in significant environmental improvements.

With the effectiveness of the EIA process under the EPBC Act in question, the independent review currently under way provides a platform for the Commonwealth Government to consider reforms. The review is due to be completed by 31 October 2009, and its recommendations are eagerly awaited.