The Australian government learned important lessons from its environmental offset audit process, officials told a webinar last week, but is refusing to publicly release the full report on its findings.

The audit was announced by the government in June last year to investigate compliance of offset sites approved under national environmental law over the last 20 years.

Australia is among the countries globally with the broadest use of environmental offsetting requirements, and as a number of countries are considering an offsetting mechanism as one of their measures to meet targets under the Global Biodiversity Framework, many are keeping tabs on how successful Australia is.

Environment Minister Tanya Plibersek last week said the findings of the audit highlighted the need for businesses to be better informed on how to meet their compliance obligations, which include compensating for biodiversity impact caused by major developments.

Her office said that around one in seven project developments could be in breach of their offset conditions, when announcing oversight bodies as part of the Environmental Protection and Biodiversity Conservation (EPBC) Act reforms.

Speaking at a webinar on Friday regarding the reforms, Andrew McNee, division head at the Department of Climate Change, Energy, Environment and Water (DCCEEW), said the audit was important, given that offsets are often part of projects’ conditions of approval under the EPBC Act.

“There are many projects that have offsets, so ensuring that they’re working as intended is a critical part of ensuring that environmental outcomes are met and that people are meeting their requirements,” he said.

He said that 222 projects were audited, out of which 32 were found to be potentially non-compliant.

McNee said the department had taken some form of compliance action against thirteen of those projects,  and is continuing to investigate the other 19 projects that could be in non-compliance.

“They were non-compliant in different kinds of ways, sometimes it was administrative, other times it was more significant, for example not lodging documents that were required around offset management plans … or the requirements were not met,” he said.

He also noted there was an example of a project in New South Wales where biodiversity offsets were not retired.

“There were a variety of non-compliance we needed to further investigate,” he said, adding that fines and directions to amend conditions of projects were tools the department could use to bring projects back into compliance.

For more serious forms of non-compliance, McNee said the pursuing action through civil and criminal court proceedings was also available.

The audit had been “a very valuable exercise” in understanding where non-compliance regarding offsets were occurring and how to resolve that, according to McNee.

“We’ve been able to bring all those results and fine-tune how that offset audit will continue into the future,” he said.

“The tools that are proposed in the new bill … will also give us some important ways to take forward this, and we’re looking forward to continuing to look actively at other offsets projects.”

However, the government has not publicly released the audit report itself.

A DCCEEW spokesperson told Carbon Pulse it was not a public document without elaborating further.

This is despite Minister Plibersek last week saying the findings of the audit had led her to set up a dedicated team within the department to “proactively monitor offset compliance and projects that have been approved under national environment law”.

This function would be transferred to Environment Protection Australia once it is established, she said.

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Annica Schoo, lead environmental investigator at Australian Conservation Foundation (ACF), noted it was “unusual” for the government not to release the audit, given the government has repeatedly promised more transparent information as part of its environmental law reform agenda.

“Minister Plibersek committed to more transparency when she announced the Nature Positive Plan and referred to the results at a high level in her announcement about establishing a new EPA,” she told Carbon Pulse.

Megan Evans, senior lecturer at the University of New South Wales, told Carbon Pulse Tuesday that the limited details the government has released on the audit’s findings could indicate a much larger problem.

“If one out of seven are potentially non-compliant, then this would I think be a massive underestimate of actual environmental performance of environmental offsets, because the conditions are usually so lax that they’re unrelated to environmental performance,” she said.

“Better enforcement is needed, but most offset conditions are so lax that better enforcement won’t actually deliver better environmental outcomes. That problem is at the assessment and approval stage.”

ACF’s Schoo came to a similar conclusion.

“The sad thing is that one-in-seven failed offsets due to non-compliance is a drop in the ocean compared with the offsets which have failed due to the department’s poor condition-writing, acceptance of poor offsets, allowance of years and years of delay and general buckling to industry,” she said.

“Then, after all that, if a non-compliance is uncovered the worst the department will do is change the conditions of the approval or issue a measly infringement notice of about A$19,000 ($12,000). More likely than not, it seems, it will just close the case.”

Evans noted that compliance with environmental law doesn’t necessarily relate to environmental performance.

This is particularly the case with environmental offsets, since these conditions are frequently “backloaded” or shifted to post-approval, she said.

“In practice, many offset conditions are worded like ‘develop an offset management plan’. These are very easy to comply with, but says nothing about whether the resulting offsets are actually ever delivered or if they are actually effective,” she said.

Schoo described offsetting as a “high risk policy mechanism”, saying environmental advocates were frustrated the government’s full suite of reforms was unlikely to be delivered in this term of government.

“It is so clear we need a root-and-branch overhaul,” she said.

DCCEEW Division Head of Nature Positive Taskforce James Tregurtha told the webinar the government was committed to delivering the final part of the EPBC reforms, but said further consultation was needed to resolve “substantial issues that require significant work”.

By Mark Tilly – mark@carbon-pulse.com

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