Qld Environmental LawAssociation Annual Conference

29 May 2014

Jason Richard (Principal Ecologist)Queensland Office

Level 22, 127 Creek Street, Brisbane

What is an offset? Principles underpinning offsets Challenges to effective offsetting The new Queensland Environmental Offsets Policy Limitations of the new (and old) framework

The Productivity Commission in its 2013 review of major projectassessment processes described environmental offsets as:

“environmentally beneficial activities that counterbalance orcompensate for the adverse impacts of a development on theenvironment.”

No net loss

Species composition,

habitat structure,

ecosystem function

Significant

adverse

residual

impact

Net gainAvoid, reduce and

mitigateCounterbalance

CompensatePeople’s use and cultural

values

Measurable

conservation

outcomes

A) Remnant Brigalow ecosystem B) Regrowth Brigalow ecosystem

How much of B do you need to make up for loss of 1ha of A?

Protecting habitat which already exists = net loss

Relying on restoration/revegetation = net loss

Source: Bekessy et al (2010)

1. +

= ?

?

Equivalence?

1. Restoration is feasible.2. Clearing threaten a species,

population, or ecologicalcommunity.

3. Adaptive management.4. Offsets provide values for periods

commensurate with impacts fromclearing.

5. Adequate auditing and compliance.

1. 2002 – Fish Habitat: Mitigation and Compensation forWorks or Activities Causing Marine Fish Habitat Loss

2. 2005 – Policy for Vegetation Management Offsets3. 2006 – Offsets for Net Gain of Koala Habitat in Southeast

Queensland Policy4. 2008 – Queensland Government Environmental Offsets

Policy5. 2011 – Biodiversity Offset Policy6. 2014 – Environmental Offsets Act and single Queensland

Environmental Offsets Policy

1. Five overlapping policies.2. State and Federal policies trading in different currencies

(RE’s vs habitat/ecosystems).3. Lack of clarity around when offsets are required.4. Multipliers which varied within and across policies.5. Lack of “off the shelf options”.6. Lack of clarity around financial settlement offsets.7. Constantly shifting policy – several iterations over life of

single project.8. Difficulty in locating appropriate offset sites.

1. A ‘one stop’ for environmental offsets.2. A new Queensland Environmental Offsets Policy.3. Applies to prescribed activities and prescribed

environmental matters.4. Includes new (off the shelf) tools such as Direct Benefit

Management Plans and Strategic Investment Corridors.

Environmental Offsets Act (2014)

• Provides the foundation an offset and how it is provided.

• Defines prescribed activities (section 9), for which an offsetmay be required.

• Defines prescribed environmental matters (section 10);

• Establishes the concept of significant adverse residualimpact.

• Establishes the Offset Account, administered by DEHP;

• Gives effect to the new Queensland Environmental OffsetsPolicy.

When the Policy Applies

1. Where ‘prescribed activities’ result in significant adverseresidual impacts to ‘prescribed environmental matters’,including:

• A Matter of State Environmental Significance (includingan existing offset area);

• An accredited Matter of NES;

• A matter of local environmental significance under alocal planning scheme

2. Offsets may not be required where there is a significantresidual impact on a prescribed environmental manner

Offset delivery

1. Authority holder must notify administering agency ofintended approach prior to commencement of activity.

2. Greater emphasis on financial settlement.

3. Proponent-driven (land based offsets, DBMP, StrategicBenefit Investment Corridors) remain an integralcomponent.

4. Combination of financial settlement and proponent-drivenoffsets possible.

5. Draft Financial settlement offset calculator available.

Offset Ratios

1. Capped at 4:1 for most values.

2. Up to 10:1 for protected areas.

3. 3:1 for Koalas in SEQ, plus 3 xon ground costs.

4. As low as 1:1 for some values.

Financial Settlement Offsets

1. An authority holder can acquit offset obligations formarine/aquatic and terrestrial environments via payment tothe Offset Account.

2. On ground operations may commence when payment isreceived.

3. Standard payment is based on the following formula:

Financial settlement = (total offset area on ground x cost perha + landholder incentive payment + admin cost)

Financial Settlement Offsets – Example

Financial Settlement Offsets – Example

Clearing 35ha of Wallum Froglet habitat, Maroochydore

Financial settlement = (total offset area on ground x cost perha + landholder incentive payment + admin cost)

Total offset area on ground: 35 x 4 (multiplier) = 140haCost per ha: 140 x $20,000 = $2,800,000Landholder incentive: 140 x $17,694 (UV/ha) = $2,477,160Admin cost: 25% = $700,000

TOTAL = $5,977,160

Proponent-driven offsets

• Must deliver a conservation outcome:

A conservation outcome is achieved by an environmentaloffset for a prescribed activity for a prescribedenvironmental matter if the offset is selected, designedand managed to maintain the viability of the matter.

• Legally secured – although offsets can be cleared?

• Must be set out in an Offset Delivery Plan.

• Can be delivered solely via Direct Benefit Management Plan.

Limitations – capped multipliers

• The Policy seeks to cap risk multipliers at 4:1 for mostmatters.

• Aside from being arbitrary in nature, experience tells usthese are unlikely to be adequate to accommodate risk offailure.

• For example – Green and Golden Bell Frogs at SydneyOlympic Park, ultimate offset ratio 19:1.

Pickett, E.J., Stockwell, M.P., Bower, D.S., Garnham, J.I., Pollard, C.J., Clulow, J. & Mahony, M.J.(2013). Achieving no net loss in habitat offset of a threatened frog required high offset ratioand intensive monitoring. Biological Conservation, 157, 156–162

Limitations – ‘no net loss’ and like for like?

• No recognition of irreplaceability.

• Substitution of values (that is, offsetting the clearing areawith a different, albeit similar value) and provision of offsetshundreds of kilometres from the offset site.

• Habitat or ecosystem-based approach can be likened togrouping overlapping but often quite separate goals.

Limitations – Irreplaceability

Limitations - time lag in delivery and restoration uncertainty?

• There is no offset framework in Australia which adequatelyaddresses time lag.

• Ideally, the offset would prove itself before the value wasremoved.

• Uncertainty around restoration can be factored in to theequation.

The positives – strategic investmentcorridors

• Landscape context.

• Investment in strategic corridors.

• Potential to reduce ad hoc deliveryof offsets.

• See Galilee Basin Offset Strategy foran example.

• Doesn’t guarantee you’ll meet EPBCAct requirements.

The positives – defining significant residual impact

• Determining whether an impact is significant should not fallto the proponent – guidance is required.

• Offsets Act defines ‘significant residual impact’.

• Guidelines will be developed to determine what is, and whatis not, a significant residual impact.

• Reduced costs and increased certainty for proponents.

The unknowns

• Offset assessment guide (calculator)

• Habitat quality assessment guideline

• Self administered Code of Compliance

• Offsets are a critical policy tool.

• Streamlined but potentially costly to implement.

• There is a price to pay for certainty through a financialsettlement.

• Engage the process early and seek advice on deliveryoptions for offsets.

• Ensure that the dialogue extends to the C’wlth.

• Invest in comprehensive baseline studies.

Jason Richard - 0425 881 087

Principal Ecologist

Level 22, 127 Creek Street, Brisbane

Adelaide - (08) 8372 7829 / Brisbane – (07) 3221 3352

Geelong – (03) 5221 8122 / Melbourne – (03) 9377 0100

www.ehpartners.com.au