AICD sits down with Herbert Smith Freehills Kramer environment and planning partner, Peter Briggs, to discuss the key changes to the new Commonwealth environmental laws, and the top considerations for directors progressing projects in the new year.
Q. Can you tell us a little about the new environment laws and why they matter?
After many years of false starts, amendments to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) have been passed following a deal between the Federal Government and the Greens. This legislation is Australia’s peak environmental legislation, and is designed to protect matters of national significance (such as species, world heritage and the Great Barrier Reef) from the significant adverse impact of actions.
The legislation has been criticised as being cumbersome, complex, slow and expensive, while at the same time failing to deliver the protection of these matters.
The legislation has historically been difficult to amend, because of the diverse interests that intersect with the legislation and the complexity of the law, and this represents the most significant amendments to the EPBC Act in 20 years.
While the amendments have been passed, whether they are successful in lifting environmental assessments, protecting our nationally significant matters and delivering streamlining and efficiency for projects will depend on its implementation. There is a legislative and administrative piece here – the amendments must be supported by regulations, national environmental standards and the establishment of new agencies – as well as a cultural piece that will determine its success.
Q. What are the main changes to the environment laws?
The detail of the changes have been neatly captured in our recent articles. Some of the more significant changes include:
- New statutory tests that apply to a range of decisions under the EPBC Act, being that decisions must:
- not have an unacceptable impact as that term is now defined
- be consistent with national environmental standards (which are yet to be made)
- pass a 'net gain' test (which is yet to be defined).
- A new 'streamlined assessment' approach for new projects which aims to reduce approvals timeframes. The approach requires all of the assessment and consultation for applications to be frontloaded before a decision that the streamlined assessment process applies. 'Fossil fuel actions' (e.g. coal and gas projects) are excluded from this new assessment process.
- Higher penalties and a greater focus on enforcement, auditing and compliance. Bodies corporate could be liable for a penalty of 10% of the annual turnover of the body corporate for the 12-month period, or 2.5 million penalty units (currently approximately $825m). The regulator will also gain powers to issue stop work orders.
- Establishment of the National Environment Protection Agency (EPA), which will be a body independent of the Minister, and which will have responsibility for compliance, monitoring and auditing of compliance with bilateral agreements and regional plans, and can be delegated assessment and approval functions.
- Establishment of Environment Information Australia (EIA), a new environmental data agency which will be responsible for determining data quality, and preparing the State of the Environment reports.
- Reforms to environmental offsets including the ability to secure offsets by way of financial contributions in certain circumstances.
- Changes to land clearing exemptions for grandfathered land uses meaning certain actions that previously did not require environmental authorisation will no longer be able to rely on the exemption.
Q. What are the reforms intending to fix or strengthen?
The reforms aim to streamline and speed up the assessment and approvals process for large projects. They also aim to provide clearer guardrails and standards to protect the environment, and provide for an 'early no'.
It is no secret that planning processes are clunky and slow, delaying the roll out of critical national infrastructure. Significant projects have been held up by lengthy decision-making timeframes, duplication between federal and state systems and referrals to other regulators or independent bodies as a result of community or council objection.
We recently reviewed EPBC Public Portal data and found that only 1 of the 89 renewable energy projects referred in New South Wales, Queensland and Victoria since 2023, that requires assessment under the EPBC Act, has received a final decision.
It is why industry have been largely supportive of the changes to the EPBC Act and why the government was pushing to get them through before the years’ end.
However, as I mentioned earlier, the key to making the EPBC Act work well in 2026 will be in the implementation.
Q. Any practical uncertainties or risks directors should be aware of?
Top three considerations for directors following the recent changes:
1. For new projects going forward, we are going to see some implementation challenges, and potentially greater litigation risk as a result
Much of the detail around the National Environmental Standards is still being developed, and concepts such as ‘net gain’ and ‘unacceptable impact’ will need to be interpreted and applied in practice.
Working through these changes may lead to uncertainty while regulators and external advisors work to implement these new requirements. They could also increase the risk of judicial review by creating additional grounds for challenge.
2. For existing projects, engage with your external advisors about project specific risks
Although these reforms will not immediately affect existing EPBC Act approvals, the staged commencement of amendments provides for companies to proactively review existing controls around environmental compliance. A targeted internal audit focusing on high-risk activities and condition compliance can help identify and address gaps early, reducing the likelihood of enforcement action.
With the new EPA expected to actively exercise its expanded powers and enforcement options, early engagement and preparation will be critical.
3. There is a big increase in penalties and a greater focus on compliance
Directors should be aware that penalties have also significantly increased, up to approximately $825 million or 10% of annual turnover. These new penalties are not yet in effect, but will commence some time before 1 December 2026, so this is the time to take steps to audit EPBC Act compliance.
Q. What should directors and executive teams be thinking about now to prepare in 2026?
Directors, at a minimum, should consider the above three considerations to ensure they meet the new requirements. Beyond these, there are several other important steps to take now.
Start by reviewing the project pipeline. Identify projects currently in development or planning stages and assess whether adjustments are needed to align with the amended EPBC Act.
Next, think strategically about streamlined assessment. Consider whether any future projects could benefit from this approach once the provisions commence, and plan ahead to take advantage of these opportunities.
Finally, keep a close eye on state planning approvals and how they interact with federal requirements. Our recent survey on the state of planning approvals for clean energy projects in NSW revealed that more than two-thirds view State planning approvals in NSW as a bigger challenge than federal environmental laws. While proposed reforms such as the NSW Planning Systems Reforms Bill aim to streamline processes, industry feedback suggests more needs to be done to accelerate project delivery. Boards should ensure their teams are monitoring these developments and factoring state-level requirements into project timelines and risk assessments.
Latest news
Already a member?
Login to view this content