The Environmental Offsets Policy outlines how the Australian Government considers offsets under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). It explains what offsets are and when offsets can and should be used. It also sets out ten policy principles.
Principles one to eight explain what an offset must do to be considered suitable. Principles nine and ten provide guidance on how the minister will make decisions when assessing offset proposals.
It is at the minister’s discretion to determine how an offset proposal is evaluated on a case-by-case basis. Policy will be applied having regard to the circumstances of each case.
What the principles mean
If you are proposing to take an action, for example you want to build some new infrastructure such as sheds, roads, or a new dam. If the action is likely to significantly impact nationally protected matters (including significant plants, animals, ecological communities or places), you will need to avoid or mitigate this impact as much as possible. If you cannot completely avoid or mitigate the impact, you may have what is called a residual significant impact. Residual significant impacts must be offset.
An offset proposal must demonstrate how the offset will provide an environmental benefit at the offset site. Including how it will compensate for any residual significant impact at the impact site. It is important that an offset proposal that is provided to the minister meets the first eight offset principles. Principles nine and ten will help guide the minister in assessing your offset proposal. The minister will then determine, on a case-by-case basis, whether it is suitable and should be approved.
Suitable offsets must deliver an overall conservation outcome that improves or maintains the viability of the aspect of the environment that is protected by national environment law and affected by the proposed action.
If you will significantly impact a protected matter, you must make up for any residual impact through an offset. In most cases the offset will need to be for the same attribute of the environment you are impacting, not just the same species or place.
For example, if you are impacting an endangered animal’s breeding habitat, the offset will also need to protect breeding habitat, rather than its foraging habitat. The exception to this rule is if you can prove it would deliver a better environmental outcome to protect a different attribute.
Offsets must completely compensate for the impact to the point that the environment is in at least the same, if not a better state, than if the action you are undertaking never occurred. To ensure viability is maintained, the protected matter must, to the same degree, be able to survive or live successfully despite the action occurring. If you are implementing an offset that results in maintaining the viability of the aspect of the environment affected by the proposed action, you are causing there to be no net loss. If your offset goes beyond this, to the point where you are improving the viability of the aspect of the environment, you will be creating a net gain.
Suitable offsets must be built around direct offsets but may include other compensatory measures.
In most cases, at least 90% of your offset must be a direct offset. A direct offset is one which provides an on-ground benefit to the protected matter that you are offsetting for. Direct offsets can include securing and restoring land, threat abatement programs, and captive breeding and release programs.
Other compensatory measures, also called indirect offsets, are activities that benefit the protected matter indirectly, such as research programs which provide us with more information about an endangered animal. If you want indirect offsets to make up more than 10% of your total offset package you will need to justify the reasoning for this, with regard to the criteria set out in the Environmental Offsets Policy. The exemption criteria include where:
- it can be demonstrated that there will be a greater benefit to the protected matter by increasing the amount of other compensatory measures than would otherwise be achieved through direct offsets alone, or
- scientific uncertainty is so high that it is not possible to determine a direct offset that will benefit the protected matter.
Economic or financial justifications will not be accepted as a valid reason to increase the percentage of indirect offsets included in an offset package.
Suitable offsets must be in proportion to the level of statutory protection that applies to the protected matter.
Protected matters include nationally significant plants, animals, ecological communities, and places that are listed under the EPBC Act. For listed threatened plants, animals and ecological communities, listing is based on how likely they are to become extinct in the wild in the future.
- Critically endangered species are more likely to become extinct than endangered species, and
- endangered species are more likely to become extinct than vulnerable species.
Because of the greater likelihood of extinction for some protected matters there is a greater risk involved with actions that are likely to impact them in some way.
To manage this risk, offsets for impacts on a protected matter with a higher level of conservation status (for example, critically endangered species) will need to be greater than those with a lower conservation status (for example, vulnerable species).
Suitable offsets must be of a size and scale proportionate to the residual impacts on the protected matter.
To meet principle 1 and deliver an overall conservation outcome, offsets need to be proportionate to the size and the scale of the impact. In general, this means that the larger your impact, the larger the offset will need to be. Sometimes the total size of an offset can be reduced if you are able to significantly improve the habitat in a certain area, or significantly decrease the risk that habitat would be lost in the future.
In calculating the potential size of an offset, the minister will consider the:
- level of statutory protection applied to the matter,
- attributes that are being impacted,
- level of threat a potential offset site is under,
- time it will take for an offset to be delivered, and the extent to which an offset site might be improved.
Offset assessment guide provides more information on how to calculate offset requirements.
Suitable offsets must effectively account for and manage the risks of the offset not succeeding.
There are two main risks that the minister will consider when deciding if an offset is appropriate and suitable. The first is that the impact from the action may be so significant it cannot be made up for in an offset. This risk is dealt with through the assessment process under the EPBC Act.
The second risk is whether an offset is likely to be successful in delivering the conservation gain. For example, this could be because management activities such as revegetation do not produce good habitat for the protected matter and the site is unable to support that matter into the future. Another example of an offset not delivering is if animals which are a part of a captive breeding program do not reproduce and cannot be released back into the wild.
A good offset proposal will put in place measures to manage these risks and make sure the offset is successful. This is often done through the implementation of an Offset Management Plan.
Suitable offsets must be additional to what is already required, determined by law or planning regulations or agreed to under other schemes or programs (this does not preclude the recognition of state or territory offsets that may be suitable as offsets under the EPBC Act for the same action).
To be considered an offset, your activity must deliver a conservation gain for the protected matter in a way that is new or additional to what is already required. This means that if you already have a responsibility to undertake an action such as feral animal management on your offset site, you cannot include this as part of your offset. Similarly, if you have received funding under a grant program to plant habitat trees in an area it would not count as an offset.
However, if you were to undertake additional activities on land that is already being managed for other purposes, the minister may consider that as an offset. For example, if you have removed weeds from an area as part of your responsibility as a landowner under local government regulations, you might be able to replace them with native plants as an offset if you weren’t already obliged to do so under another law or scheme.
Whether an offset is additional will be considered on a case-by-case basis by the department. In an offset proposal it is important to be clear what activities you are already required to undertake. You must show that the new activities will benefit the matter you are offsetting and demonstrate that the new activities will not conflict with your existing requirements.
Often the action you are proposing will need approval by state and territory governments as well as the Commonwealth. Because of this you might also need to provide an offset under state or territory laws. If the offset is for the same matter being impacted by the same action, additionality considerations will generally not apply. To ensure offsets under different legislation align it is important to talk to both governments early in the referral and assessment process to confirm that the documentation establishing the offset is sufficient to demonstrate that it is additional.
Suitable offsets must be efficient, effective, timely, transparent, scientifically robust and reasonable.
To be considered as an appropriate offset, your proposal must demonstrate that the activities you are undertaking, such as securing and improving land, will effectively make up for the impact of the action on the protected matter. It is also important that you can deliver your offset in a timely manner. Offsets implemented either before, or at the same time as the impact have a greater likelihood of delivering a conservation gain for the protected matter.
It is also important that your offset is based on scientifically robust and transparent information. This provides certainty that the outcomes can be achieved. You may be required to undertake desktop modelling and field work to show that an offset proposal is reasonable and can be successful. Any data that is gathered should be reported in a transparent manner. This includes the information you use to decide on an offset, as well as the information you use to measure its success.
Suitable offsets must have transparent governance arrangements including being able to be readily measured, monitored, audited and enforced.
As part of a condition of approval for your action, you will be required to report on how you are managing your offset. Cost associated with managing an offset, for as long as that offset is required, is the responsibility of the proponent. Where a proponent decides to have the offset site managed by a third party, then very clear contractual arrangements need to be in place and presented in the proposal.
Offset proposals should clearly identify how success will be measured. You will be required to regularly report your progress towards achieving these goals. If you cannot achieve those goals, you may have breached your approval conditions, which could lead to compliance action. To make sure that the delivery of offsets is transparent, the minister will likely require you to report annually on your offset. These annual reports may be made publicly available.
In assessing the suitability of an offset, government decision-making will be informed by scientifically robust information and incorporate the precautionary principle in the absence of scientific certainty.
The minister or their delegate will always make decisions based on the best information available. Key sources of information for the minister include:
- approved recovery plans
- threat abatement plans
- conservation advice
- ecological character descriptions; and
- management plans.
Where Commonwealth approved documents are not available, peer reviewed scientific information may be used. If there is a lack of full scientific certainty, for example from limited data, the precautionary principle will be applied.
In assessing the suitability of an offset, government decision-making will be conducted in a consistent and transparent manner.
The minister assesses, on a case-by-case basis, whether an offset is suitable for the significantly impacted protected matter(s). The minister is guided by the Environmental Offsets Policy, including the offset principles and uses the Offsets assessment guide to assist in calculating the size of an offset required for threatened species and communities. The Environmental Offset Policy and the Offset assessment guide are both available on our website. Certain decisions made under the EPBC Act, such as approval decisions are also published on the website for the public to view.