Factsheets · Nature & the Reef

Understanding Environmental Offsets

01 August, 2014

This factsheet provides an overview of environmental offsets that may be required in Queensland.

This Factsheet is for general information purposes only, it is not legal advice. Important legal details have been omitted to provide a brief overview of this area of the law. If you require legal advice relating to your particular circumstances contact EDO or your solicitor. © EDO (Qld) “Environmental Offsets” current as at August 2014 

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Key points

  • Offsets are intended to ‘counter-balance’ the environmental impacts of a particular project or activity. It is important that they never be used to make unacceptable projects acceptable.
  • In Queensland, only ‘significant residual impacts’ are required to be offset.
  • Before proposing an offset, the project proponent must first prove they cannot ‘avoid’ the impacts on the environment. ‘Avoided’ areas are largely considered to be those under the protected area estate (e.g. national parks).
  • If impacts cannot be avoided, then the proponent must try and mitigate (reduce) the impacts. If impacts cannot be avoided or mitigated - in a cost effective way – then an offset can be proposed.

Contents

  1. What is an offset?
  2. What types of offsets are there?
  3. When can offsets be used?
  4. Problems with offsets
  5. What can I do if I am concerned about a proposed offset?
  6. Accessing the register of approved offsets
  7. Offset Example: China First Coal Project, Galilee Basin Qld
  8. Useful Contacts and Further information

1.  What is an offset?

An offset is a conservation action or amount of money that a developer or mining company is asked to contribute to ‘counterbalance’ the environmental impacts of their development. In Queensland, offsets are regulated under the new Environmental Offsets Act 2014 and the accompanying regulation and policy, which provide that offsets are required to counterbalance ‘significant residual impacts of particular activities on prescribed environmental matters’.[1]

Offsets are commonly found in conditions of approval, permits or other licences, such as a separate condition of an Environmental Authority or a Development Approval. The condition(s) usually require an offset management plan to be implemented.

2.  What types of offsets are there?

In Queensland, an offset will be one or a combination of the following two types of offsets available:

a) Financial settlement offsets

Where the developer pays an amount of money to the Department of Environment and Heritage Protection or local government and that money is spent on undertaking activities to satisfy the offset’s delivery, such as purchasing protected areas like national parks throughout Queensland. Financial settlement amounts are calculated using the Financial Settlement Offset Calculator; or

b) Proponent-driven offset

Where a developer is responsible for undertaking the delivery of the offset, for example, the developer could enter into an agreement with a landholder who has environmental values on his/her property generally equivalent (or higher) to the values proposed to be impacted by the primary development. A specific area of land may then be protected or feature of that area managed to provide for the offset of the ‘significant residual impact’ of a development (‘land-based offset’).

The new policy introduces offset planning strategies, such as Strategic Offset Investment Corridors, through which land is pre-identified and voluntarily offered as being suitable for offset management activities, and Direct Benefit Management Plans (DBMP), which are pre-approved packaged offset investments. A DBMP can be suggested by other interested conservation groups who may be aware of environmental features that would benefit from protection and/or management in a DBMP. This can be a valuable tool for securing resources to assist in the conservation of environmental features.

3.  When can offsets be used?

In Queensland, offsets can only be used for significant residual impacts on a prescribed environmental matter,[2] which include certain matters of national, state or local significance. There are separate requirements for offsets in protected areas, which require offset of the public benefit values lost, and those in non-protected areas. Typically offsets can be used for significant residual impacts of most types of major development including mining and coal seam gas activities, coastal development, vegetation clearing and taking or interfering with protected wildlife.

Offsets can generally only be used after the developer has proven that the impacts of their development cannot be ‘avoided’ or adequately ‘mitigated.’

‘Avoided’ areas generally refer to protected areas in Queensland (such as national parks) where certain actions are not allowed to take place such as open cut mining in national parks. However, there are many activities which are allowed to occur in protected areas such as CSG pipelines, electricity infrastructure and eco-tourism developments.[3]

‘Mitigation’ generally refers to on-site activities that minimise the impacts on the environment. This may include using less intrusive technology, different construction/extraction techniques not to avoid the harm entirely but to ‘lessen it’.

If the impacts on an area or species cannot be avoided, or mitigated in a ‘cost effective’ way, then an offset may be proposed.

NOTE! Offsets should not be used to make unacceptable development acceptable. If you see a proposed offset which you think is trying to make an unacceptable development acceptable, then you are often entitled to raise this during the relevant public notification period for the approval, if there is one. Make sure you get expert help so that you understand what is being proposed.

4.  Problems with offsets

Offsets are an increasingly popular yet controversial tool in conservation. Their popularity lies in their potential to meet the objectives of environmental conservation and economic development in tandem; the controversy lies in the need to accept environmental losses in return for uncertain gains. While offsets are being widely adopted for environmental management, a number of theoretical and practical problems still exist. A brief summary of these problems, as well as possible solutions, are deliberated on below:

Problem

Description

Possible Solution

Currency

Choosing metrics for measuring biodiversity

Use multiple or compound metrics; incorporate measure of ecological function as well as biodiversity

No net loss

Defining requirements for demonstrating no net loss of biodiversity

Measure no net loss against dynamic baseline, incorporating trends; state whether no net loss is at project or landscape level; consider discounting rate

Equivalence

Demonstrating equivalence between biodiversity losses

and gains

Do not allow ‘out of kind’ trading  unless ‘trading up’ from losses that have little or no conservation value

Longevity

Defining how long offset schemes should endure

Offsets should last at least as long as the impacts of development and be adaptively managed for change

Time lag

Deciding whether to allow a temporal gap between development & offset gains

Require offsets to be delivered through biodiversity banking mechanisms

Uncertainty

Managing for uncertainties throughout the offset process

Development of a framework for  uncertainty in offsets is a research requirement

Thresholds

Defining limits beyond which offsets are not acceptable

Define explicit thresholds for impacts that cannot be offset

5.  What can I do if I am concerned about a proposed offset?

The first thing to do is ask an expert to help you understand the circumstances in which the offset is being proposed.

Remember, the Government (State or Federal) will be making its decision based on the ‘avoid – mitigate – offset’ approach, so you need to be aware of whether an adequate analysis has been undertaken for avoiding or mitigating the impacts first. For instance, the impacts can be avoided entirely? Is the area on (or close to) protected species or sensitive areas with high ecological values or cultural heritage sites? Do a search for Environmentally Sensitive Areas(ESAs)[4]to further investigate the area. What about the mitigation measures the proponent has proposed or canvassed? Are there are any other ‘cost effective’ strategies or processes that haven’t yet been discussed by the proponent?

Secondly, obtain a copy of the relevant offsets policy (State or Federal)[5]and read through it to ensure the offset is in compliance with the policy. If it isn’t, you are within your rights to raise the inconsistency with the Department or local government body assessing the offset proposal.

You might need to focus on the specific principles which underpin the Queensland Government’s main offset policy. In Queensland there are generally seven principles which underpin offsets:

  1. Offsets will not replace or undermine existing environmental standards or regulatory requirements, or be used to allow development in areas otherwise prohibited
  2. Environmental impacts must first be avoided, then minimised, before considering the use of offsets for any remaining impact.
  3. Must achieve a conservation outcome that achieves an equivalent or better environmental outcome.
  4. Offsets must provide environmental values as similar as possible to those being lost.
  5. Offset provision should minimise the time-lag between the impact and delivery of the offset.
  6. Must provide additional protection to environmental values at risk, or additional management actions to improve environmental values.
  7. Offsets must be legally secured for the duration of the impact on the prescribed environmental matter.[6]

Does the proposed offset comply with these principles or the relevant policy in general?

NOTE! If you are concerned about the impacts of a project, and the strategies the proponent has for dealing with those impacts, it is important that you are involved early on in the planning and assessment process for the development. There are two main reasons for this:
  1. The initial assessment stage (e.g. the Environmental Impact Statement) will almost always inform the final conditions of the approval for a project so it is a key chance to understand the impacts and scrutinise how the proponent says it might deal with the impacts; and
  2. For mining and gas projects in Queensland, this may be the only opportunity you have to comment on a project and retain your Court appeal rights.[7]

6.  Accessing the register of offset arrangements

Each administering agency for an offset must maintain a register of approved offsets. For those approved since the new framework came in on 1 July 2014, a single registry is being administered by

the Department of Environment and Heritage Protection (DEHP) which can be accessed by contacting DEHP on: Offsets@ehp.qld.gov.au. Prior to 1 July 2014, offsets were administered under various policies and departments. For biodiversity offsets prior to 1 July 2014, contact offsets@ehp.qld.gov.au. For all other offsets prior to the new framework, contact the Department of Natural Resource and Mines (DNRM) at: VMEnquiries@dnrm.qld.gov.au or the Department of Agriculture, Fisheries and Forestry (DAFF) at: planningassessment@daff.qld.gov.au. The Federal Government does not have a public offset register; you must contact the department to access information on a federal offset arrangement.[8]

7.  Offset Example: China First Coal Project, Galilee Basin QLD

The proposed China First Coal Project, part of the North Galilee Export Project is located in the Galilee Basin near Alpha in Central Queensland. The development is an integrated coal project including a coal mine, railway and port facility to export coal to international markets.

The China First Coal Project will severely impact on the Bimblebox Nature Refuge which comprises semi-arid woodlands with an understorey largely made up of native shrubs, forbs and grasses.[9] The refuge is recognised for supporting over 150 different species of birds, as well as other mammals, reptiles and insect species. In December 2013, the Federal Government approved the mine and provided a list of ‘offset conditions’, providing for the area of land required to be secured to offset each of the listed species impacted as detailed in this table:[10]

Species

 Required offset: Primary Habitat

 Black-throated Finch

 10,000 hectares

 Squatter Pigeon

 6,000 hectares

 Red Goshawk

 383 hectares

 Northern Quoll

 500 hectares

 Yakka Skink

 5,800 hectares

 Ornamental Snake

 270 hectares

 Dunmall’s Snake

 72 hectares

 Brigalow (Acacia harpophylla dominant and

co-dominant)

 199 hectares

The Federal Government also required an ‘offsets management plan.’

8.  Useful Contacts and Further Information

Queensland Government

Queensland Environmental Offset Policies:

http://www.qld.gov.au/environment/pollution/management/offsets/

Queensland State Planning Policy:

http://www.dilgp.qld.gov.au/planning/state-planning-instruments/state-planning-policy.html

Queensland State Development Assessment Provisions:

http://www.dilgp.qld.gov.au/planning/development-assessment/state-development-assessment-provisions.html

Federal Government

Federal Environmental Offset Policy:

http://www.environment.gov.au/resource/epbc-act-environmental-offsets-policy

 


[1] Environmental Offsets Act 2014, section 3. 

[2] Ibid, section 10. Environmental Offsets Regulation 2014, section 5 and Schedule 2. 

[3] Nature Conservation Act 1992 (Qld) sections 27, 34 and 35. 

[7] Environmental Protection Act 1994 (Qld) section 150. 

[8] However, the Federal Government does say: “all offsets will be registered and details, such as spatial information (for example GPS data), information on the relevant protected matters and the ongoing management actions required will be recorded. This information will be made publicly available on the Department’s website where it is appropriate to do so.” See: http://www.environment.gov.au/system/files/resources/12630bb4-2c10-4c8e-815f-2d7862bf87e7/files/offsets-policy_2.pdf  (page 24). 

[10] Source: EPBC 2009/4737 Attachment A:  http://www.environment.gov.au/epbc/notices/assessments/2009/4737/2009-4737-recommendation-report.pdf