Costing The Earth – The Price Of Environmental Assessment

Environmental matters are becoming increasingly complex requiring significant technical input on assessment. Consequently, the cost of assessment is on the increase particularly where reports or assessments are required to investigate any potential or current environmental impacts.

The increased requirement for technical input in environmental matters is influenced by scientific advancements in our understanding of the impacts of proposals on the environment. The need for this protection of our environment is rightfully an increasingly high priority. The Western Australian Government has recognised the need to meet the expectations of the industry and the community in protecting the environment and are taking action by proposing a mechanism to ensure environmental assessments are as good as they can be.

On Monday, 20 September 2021 the McGowan Government released a media statement seeking public, community and interested parties’ feedback into a new pricing and cost model to cover the cost of Environmental Impact Assessments. A copy of the media statement can be located here. The model is proposed to recover costs associated with the referral, assessment and implementation of Environmental Impact Assessments.

What is an Environmental Impact Assessment (EIA)?

Simply put, an EIA is a process of evaluating the likely environmental impacts of a proposed project or development. The Assessment takes into account inter-related socio-economic, cultural and human-health impacts, both beneficial and adverse when considering a development. For further reading, the EPA ‘About environmental impact assessments’ can be accessed here.

Why are EIA’s required?

The WA Environmental Protection Authority (EPA) is responsible, amongst other things, to provide the Government with advice on the potential environmental impacts of proposals, planning schemes and amendments to planning schemes. Such proposals include residential, mining, railways, pipeline proposals and more. Relevant to land development, when a proponent seeks to develop or proposes a new planning scheme, it will be referred to the EPA with the required information and documentation. The EPA will then consider the documentation with public input and further advice from relevant experts. The EPA then will produce a report of which provides an assessment and considers if the proposal, if implemented, could avoid or reduce any impact on the environment.

The process is as follows:

  • Stage 1 - Referral of a proposal to the EPA (s. 38);
  • Stage 2 - EPA to decide whether or not to assess a referred proposal (s. 38A to s. 39B);
  • Stage 3 - Assessment of proposals (s. 40 to s. 43A);
  • Stage 4 - EPA report on the assessment of a proposal (s. 44); and
  • Stage 5 - Deciding if proposal may be implemented and implementation of proposals (s. 45 to s. 48).  

Cost Recovery

A Cost Recovery model is proposed by the Department of Water and Environmental Regulation (Department) to become part of Part IV of the Environmental Protection Act 1986 (EP Act). The purpose of the cost recovery model is to improve the capacity and agility of the Department to manage increasing environmental assessment workloads. The cost recovery model will be applied to referrals, assessments and implementation of proposals under Part IV of the EP Act as a way of implementing fees and charges of the EIA’s.

The Department has sought public comment regarding the proposed cost recovery model from 20 September 2021 to 22 October 2021, subsequently, these comments and feedback are being used in the Departments assessment of the proposal. 

Key provisions of the cost recovery model are:

  • A pricing model – to set fees and charges.
  • A demand management model – to manage and expend funds.
  • Cost recovery regulations – to enact cost recovery.
  • Implementation planning – including policy for applications of fees and charges. 

More on the proposed cost model can be located here.

Why is this important?

The Governments new pricing and cost model proposal is an important step in ensuring that costs are covered by those responsible for the environmental impacts and/or for an assessment of it; and to make certain it is not a cost draining governmental budgets. This ensures that with the increase in the complex environmental matters, sufficient funds and resourcing is available to facilitate the appropriate assessment of EIA’s. Sufficient government resourcing is important to ensure that outcomes are without delay and provide certainty.     

In short, the new proposal provides that costs such as those incurred by other government agencies in seeking an EIA are passed to the proponents who have projects assessed by the EPA and those proponents are to be held responsible for the costs.

The question is whether or not the additional costs for EIA's are appropriate or likely to hinder developments. We would encourage all proponents to review the proposed cost model as it likely to significantly impact on the viability / probability of many projects moving forward. 

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.