Over the last year or so, there have been a number of legal challenges to the Commonwealth’s assessment of projects under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), the most recent of which was handed down by the Federal Court in the case of Lawyers for Forests Inc v Minister for the Environment, Heritage and the Arts and Gunns Limited [2009] FCA 330. The court considered the extent and nature of environmental impact assessment information required by the Commonwealth Minister before deciding whether or not to approve an action under the EPBC Act, and the nature and extent of some of his condition-making powers.
In this case, Lawyers for Forests (LFF) challenged the decision by the then Minister for the Environment, Heritage and the Arts (Minister) under the EPBC Act to approve Gunns’ proposal to develop and operate a pulp mill in northern Tasmania. The challenge centred around the validity of a number of approval conditions which require Gunns to establish effluent trigger levels for implementing approved response strategies, and to carry out hydrodynamic modelling of the effluent plume in Bass Strait.
LFF’s primary complaint was that these investigations should have been carried out before the Minister granted his approval, not as a condition of the approval. While LFF relied on eight grounds to allege that the Minister’s decision was invalid, the three most interesting are considered in this Environment Alert:
- LFF contended that the condition-making power in section 134 of the EPBC Act does not permit conditions to be imposed which are designed to assess the significance of impacts on the environment.
- LFF contended that the approval was not authorised by section 133 of the EPBC Act because the Minister did not take into account the precautionary principle, as required by section 391, and
- it was argued that the EPBC Act does not allow the Minister to approve the taking of a controlled action unless he believes, on reasonable grounds, that he has enough information to allow him to make an ‘informed decision’.
Freehills acted for Gunns in this case.
Conditions imposed under section 134
If the Minister decides to approve a controlled action under section 133 of the EPBC Act, he has the power to impose conditions on that approval under section 134. The Minister must be satisfied, before imposing a condition, that the condition is ‘necessary or convenient’ for protecting the relevant matter of national environmental significance, or repairing or mitigating damage to such a matter.
LFF contended that the conditions on the approval which required data collection and hydrodynamic modelling were invalid because the Minister was seeking, by the imposition of those conditions, to obtain knowledge of the environmental impact of discharges. Without this knowledge, LFF argued that it was not possible for the Minister to approve the controlled action and impose these conditions in the first place.
The Federal Court did not uphold this argument for a number of reasons, one of the key ones being that there was no evidence adduced to support the LFF’s contention.
Of more interest was LFF’s submission that the Minister cannot impose a condition on an approval unless he knows ‘with some degree of certainty’ what the environmental impact of the proposed action may be or is likely to be. In response to these arguments, the court examined advice and materials prepared by the Department and Chief Scientist that was before the Minister when he made his decision to approve the pulp mill, and observed that there was nothing which ‘would have enabled him to have been satisfied, to a level of scientific certainty, that the proposed marine outfall would have a particular impact on the Commonwealth marine environment. There was, however, sufficient information to enable him to conclude, as he did, that the likely impact of the discharge of effluent into the marine environment could be prevented or mitigated by imposing conditions …’ (our emphasis).
The court’s decision reinforced the position that absolute certainty about the nature and extent of an environmental impact is not a prerequisite to the Minister being able to decide whether to approve an action. Instead, the position appears to be that he must understand what the likely impact could be.
This does not mean that a proponent can effectively complete the environmental impact assessment after the Minister has approved the controlled action if the assessment includes insufficient information about its likely impacts on relevant matters of national environmental significance. What it does mean is that a condition that requires further environmental investigations or modelling to achieve a more precise understanding of a controlled action’s environmental impacts will be valid if the information is required to develop response and mitigation strategies.
Precautionary principle
Section 391(2) of the EPBC Act defines this concept as follows:
The precautionary principle is that the lack of full scientific certainty should not be used as a reason for postponing a measure to prevent degradation of the environment where there are threats of serious or irreversible environmental damage.
Section 391(1) stipulates that the Minister ‘must take account of the precautionary principle in deciding whether to approve a controlled action, to the extent he ‘can do so consistently with other provisions of the [EPBC] Act’.
Before deciding whether to approve a controlled action, section 136 requires the Minister to consider ‘principles of ecologically sustainable development’. These principles are defined to include a host of matters, of which only one is the precautionary principle. The court found that the Minister was not required to take into account the precautionary principle in isolation, nor give it pre-eminence over other relevant criteria specified in the EPBC Act.
Also of importance was the court’s comments on the LFF’s argument that it must evaluate whether the Minister gave a ‘proper, genuine and realistic consideration’ to the matters which he was required to have regard. The formulation of this aspect of the LFF’s case can be traced to a decision of Justice Gummow in Khan v Minister for Immigrations and Ethnic Affairs [1987] 14 ALD 291, but which has subsequently been questioned by the courts on the basis that it invites the courts to assess the merits, rather than the legality, of the administrative decision that is being challenged. Despite echoing these concerns, the court found against LFF on the basis that:
- it was doubtful whether the Minister was required to have regard to the precautionary principle at all, because the principle only comes into play where there exists ‘threats of serious or irreversible environmental damage’. The court in this instance felt that the evidence indicated that the Minister did not believe such a threat existed, and
- in any event, the Minister appeared to give effect to the precautionary principle by applying conditions which endeavoured to close the gap of ‘scientific uncertainty’ by requiring further data collection and hydrodynamic modelling.
The court was critical of the LFF’s selective analysis of the evidence and the ‘veiled attack on the merits of the Minister’s decision’. Based on the court’s decision, applicants will need evidence to support a contention that the Minister was obligated but failed to consider the precautionary principle and try and avoid legal arguments which invite the court to stray into a consideration of the merits of the Minister’s decision.
Insufficient information about environmental impacts
The LFF contended that the information which was before the Minister at the time he made the decision was not sufficient to enable him to make an informed decision as to the likely impact of the proposal to discharge effluent into Bass Strait. In making this submission, the LFF relied on the various conditions which require further studies and monitoring to be carried out. It was suggested by the LFF that this implied the Minister did not, when he made his decision, have enough information to make an informed decision. The legal consequence of this was that the Minister’s decision was not authorised by the EPBC Act, and hence invalid.
A critical element to the LFF’s case was the ability for the Minister, under section 132 of the EPBC Act, to request additional information so that he could make ‘an informed decision’ on whether or not to approve the controlled action. He can seek such information if he forms the subjective opinion that he does not have sufficient information to make an informed decision.
The LFF’s argument was that the Minister cannot approve an action unless he has material before him which, objectively, enables him to make an informed decision. If he does not have this information, he must request further information in accordance with his powers under section 132 before deciding whether to approve the controlled action.
These arguments were rejected by the court because the imposition of an objective test to assess the sufficiency of information before the Minister would, in the event of a legal challenge, almost certainly require the Federal Court to assess the merits of competing submissions.
Conclusions
A judicial review of an administrative decision in the Federal Court is not concerned with the merits of whether a decision is right or wrong. A judicial review can only consider the legal validity of a decision. Despite this, on one view it could be said that a number of recent judicial review challenges under the EPBC Act, including this one, have been used by applicants to ‘dress up’ their objection to the merits of the Minister’s decision to approve a project with a veneer of legal argument.
The key themes arising from this case for project proponents are three-fold:
- the Minister must be satisfied of the likelihood, not the certainty, of the nature and extent of an environmental impact before deciding whether to approve a controlled action
- the Minister nevertheless has expansive power to impose conditions on an approval to require further investigation, analysis and monitoring to understand, with greater precision, a likely impact. The purpose of imposing such conditions are not for impact assessment purposes that should be carried out before the Minister decides whether to approve a controlled action, but to enable the Minister to make informed decisions about mitigation and response strategies, and
- the Minister is not required to have regard to the precautionary principle unless he believes, on the information before him, that the action poses a threat of serious and irreversible damage to the environment. Furthermore, even if such a threat exists, the precautionary principle is but one matter the Minister must have regard to and is not afforded any priority in the minister’s decision-making process.
The court's decision has mixed implications for project proponents. While it means that a proponent is not required to carry out the extent of detailed design and impact assessment that is sometimes alleged by opponents, it also means that conditions requiring very extensive data collection, modelling and monitoring can be required for the purpose of approving construction and operation of environmental management plans including incident response strategies and protocols. Given that the pulp mill approval was granted nearly 18 months ago but that Gunns has been given until 2011 to comply with these conditions, the court’s decision emphases the importance of carefully planning for, and taking account of, this delay risk in developing project timetables.
More information
For information regarding possible implications for your business, contact