The road to environmental approvals for projects in WA is currently a winding one, with bottlenecks in environmental approval processes creating extensive delays in project approvals, trapping actual and potential investment. This has led WA Premier Roger Cook to bluntly state that the “system isn’t working”.
In recognition of this, the WA Government (the Government) commissioned a review, the Independent review of WA environmental approval processes and procedures (the Vogel-McFerran Review) to provide recommendations as to how WA’s environmental assessment and project approval processes can be streamlined. The Vogel-McFerran Review produced 39 recommendations, all of which have been either accepted or noted by the Government.
This article identifies the issues with current environmental approval processes, examines the likely effect that the implementation of key recommendations from the Vogel-McFerran Review will have on project proponents and industry, and also sets out how these recommendations align WA’s regulatory focus with topics of national and global importance.
Key takeaways
The current environmental approval system is inefficient, uncertain and costly, with an estimated $318 billion of current and future investment trapped in projects that are pending WA and/or Commonwealth environmental approvals.
The Government has accepted various recommendations from the Vogel-McFerran Review aimed at improving the efficiency and quality of the EPA’s environmental assessment activities, its general administrative activities and how it engages with stakeholders.
We expect these reforms to materially benefit project proponents and industry, in particular through reduced assessment timeframes and duplication, thereby increasing WA’s attractiveness for investment.
The recommendations also align with matters of national and global significance, such as contemporary biodiversity regulation and upcoming federal environmental approval reforms.
Finally, the Government has committed $18 million to address the EPA’s assessment backlog and prioritise the allocation of additional resources for ‘critical approvals’.
Issues with current EPA assessment processes
Under the Environmental Protection Act 1986 (WA) (EP Act), proposals for projects that, if implemented, would likely have a 'significant effect’ on the environment are referred to the Environmental Protection Authority (EPA) for an environmental impact assessment. The EPA then conducts its assessment and prepares a report to the Minister outlining the key environmental factors identified in the course of the EPA’s assessment and making a recommendation to the Minister as to: (1) whether the proposal should be implemented; and (2) if so, on what conditions (if any).
In 2024, the EPA will publish the highest number of assessment reports in a decade (estimated to be around 25 reports). This is anticipated to grow even further in 2025 with an expected 30-35 assessment reports to be published. As such, the timeframe for environmental assessments has increased substantially. The EPA’s Environmental Impact Assessment (Part IV Divisions 1 and 2) Procedures Manual sets a 40-58 week minimum target timeframe for environmental assessments, however the Chamber of Commerce and Industry of Western Australia (CCIWA) estimated that the average timeframe for major WA resources projects to receive environmental approvals (including Commonwealth approval) is closer to three to four years. This is in addition to other Government approvals like mining tenements or land access, which generally cannot be granted while the EPA’s environmental assessment process is underway. Further and more concerningly, these delays are generally administrative in nature, rather than being necessary for robust environmental assessments and outcomes.
The Government and industry stakeholders argue these delays stifle potential investment into WA, including in renewable energy and critical minerals projects. The CCIWA estimates that $318 billion of current and future investment, and 106,000 jobs, are trapped in projects that are pending WA and/or Commonwealth environmental approvals. It is therefore no surprise that the Vogel-McFerran Review found that “approvals processes have become overly complex, time-consuming, and costly - holding back economic development without any benefit to the environment" .
The Vogel-McFerran Review
The Vogel-McFerran Review report remains confidential and the Government has not indicated when (or if) it will be released in full. Despite this, the WA Government announced that it is adopting almost all of the Vogel-McFerran Review’s 39 recommendations. The recommendations propose various administrative and legislative reforms to be implemented within a timeframe of 18 months, aimed at making the EPA’s environmental assessment process more efficient, while ensuring it remains robust and fit for purpose.
Three notable recommendations which we consider in this article are:
Amending the EP Act to allow other Government approval processes to run in parallel with the EPA’s assessment process (Recommendation 27);
Reducing duplication in EPA assessments concerning projects and proposals subject to the Commonwealth’s Safeguard Mechanism () (Recommendation 38); and
Government evaluation of the EP Act’s utility in directing the EPA to prepare an assessment report to the Minister within a certain timeframe for proposals of State significance (Recommendation 14(b)).
To complement these reforms, the Government announced that it would invest $18 million to address the EPA’s assessment backlog and prioritise the allocation of additional resources for ‘critical approvals’. This includes the provision of funding to engage external consultants and technical experts to clear the assessment backlog, as well as establish a new team within the Department of Jobs, Tourism, Science and Innovation (JTSI) to prevent and resolve delays to projects of State significance (among other things).
The Government has also flagged that it will undertake further consultation with industry regarding potential reforms beyond those recommended by the Vogel-McFerran Review. These include the potential implementation of statutory timeframes for EPA processes, setting parameters around consultation requirements, and limiting the number of opportunities for public comment and appeals.
Impact on proponents and industry
If properly implemented, these reforms could significantly benefit project proponents and industry. By reducing the complexity and duration of the EPA’s approvals processes, the implementation of these recommendations will likely lower the costs and level of uncertainty associated with prospective projects in WA. In turn, this will increase the commercial viability of WA-based projects, making WA a more desirable investment destination. We examine the three recommendations noted above in detail below.
1. Parallel approvals
The Vogel-McFerran Review suggested that s 41(1) of the EP Act be amended to allow other Decision Making Authorities to issue their own approvals in parallel with both the EPA’s assessment and Ministerial decision making. While proponents would still be prevented from implementing project proposals until the EPA approval is issued, this would mean that proponents could utilise the EPA’s assessment period to obtain other approvals in tandem, leading to a significantly reduced overall project approval timeframe. This would also mean that, once EPA approval is obtained, projects could be implemented in the nearer term.
More efficient approval timeframes, as well as swifter project implementation, would materially benefit proponents and investors, as project operation and revenue generation are brought forward. On the other hand, this could mean that proponent’s resources and efforts are wasted, where, for instance, various approvals are obtained only for Ministerial consent under the EP Act to be refused. However, this is a risk that could be managed, including through the inter-government referral process.
Further, at the recent ‘AMEC WA Breaking Ground Forum’, Professor Matthew Tonts, the outgoing Chair of the EPA, noted that the EPA will be focusing on ensuring that the capacity of other Decision Making Authorities (to be delegated authority by the EPA to regulate and mitigate environmental impacts related to their portfolio) is fully utilised. The EPA is confident that, in doing so, it would reduce the regulatory pressure on the EPA and ensure that project proposals can be assessed more efficiently.
2. Duplication
The Vogel-McFerran Review suggested that the EPA should limit its assessment of projects and proposals that are subject to the Safeguard Mechanism: in doing so, the EPA should ensure that it meets its statutory responsibilities but avoids unnecessary duplication.
Our previous article on the EPA’s Environmental Factor Guideline on Greenhouse Gas Emissions (Guideline) highlighted the potential for tensions between the Guideline’s minimum linear net zero trajectory and the baseline reductions under the Safeguard Mechanism. For example, when a proponent is submitting its environmental management plan, the EPA may reject emissions reduction trajectories that comply with the Safeguard Mechanism where those trajectories are lower than those required by the Guideline (which is likely to be the case). In such a case, the proponent would need to produce new modelling, adding further costs and delay to the environmental assessment process.
With a record number of environmental assessment reports being published, and timeframes extending outwards of a couple of years, it is becoming increasingly important for the EPA to identify priority proposals and issues. Eliminating duplication around considerations of greenhouse gas emissions reductions, where already captured under the Safeguard Mechanism, would reduce delay and cost for proponents of projects, as well as reducing regulatory complexity. In turn, investment in such projects would become more enticing to investors, who will be more favourable to fewer regulatory hurdles.
3. Projects of State significance
The Government has expressed its support for the recommendation that the Government and the State Solicitors Office evaluate whether s 44(2c) of the EP Act “has any utility in being able to direct the EPA to prepare an assessment report to the Minister for Environment within a specified period of time for State Significant proposals or projects ”. In particular, the Government has noted that it will "progress a series of changes to the EP Act" , including “allowing the Minister to direct the EPA to assess a project of State significance within a specified timeframe. ”
Fast-tracking specific, critical projects would be a direct enhancement to the environmental assessment process, providing proponents with an opportunity to lobby for the use of that power in respect of their projects. However, given that the Minister already has a broad power to direct the EPA to assess any project proposal - including State significant proposals - within a specified period under s 44(2c) of the EP Act, it is unclear how the Government intends to modify this power in relation to projects of State significance. The Government could potentially seek to amend s 44(2c) of the EP Act so that the Minister does not have to consult with the EPA before making a direction, however that has not been publicly acknowledged as something the Government may pursue. Of course, a direction around timeframes is only beneficial where the EPA has the resources and mechanisms in place to allow it to achieve those timeframes, so this may not be the ‘golden ticket’ solution it might seem.
Alignment with national reform and topics of importance
The Vogel-McFerran Review recommendations also align with forthcoming changes to federal environmental approval processes as part of the Albanese Government’s Nature Positive Plan . Commonwealth Treasurer, Jim Chalmers, reiterated on 11 March 2024 that the Commonwealth Government intends to “improve and streamline” environmental project approvals through these reforms, which will include:
Amendments to the Environment Protection and Biodiversity Conservation Act 1999 (Cth);
“Accelerat[ing] approvals through better use of data” ; and
Providing improved guidance regarding when federal environmental approvals are required.
Federal reform will also see the establishment of two regulatory bodies - the Commonwealth Environmental Protection Authority and Environmental Information Australia. While the details of these changes remain unclear, they have a similar flavour to the Vogel-McFerran Review recommendations (despite some industry sources voicing concern over some of the draft proposals).
Similarly, given WA’s abundance of critical minerals, the Vogel-McFerran Review recommendations support the Commonwealth Government’s aspirations in the Critical Minerals Strategy to “enable fast, efficient and durable environmental approvals while upholding robust environmental protections ”.
Increasing emphasis is also being placed on biodiversity, both internationally in the Kunming-Montreal Global Biodiversity Framework and nationally with the introduction of the Nature Repair Market . In alignment with this, the Vogel-McFerran Review made several recommendations in relation to biodiversity, including:
To review the EPA’s technical guidance to ensure it reflects contemporary scientific understanding and a consideration of risk-based approaches to biodiversity protection (Recommendation 26(a));
To review regulatory requirements regarding the publication of data sourced from biodiversity field surveys, to ensure the maximum amount of biodiversity data is available (Recommendation 21);
To closely engage with the Commonwealth environmental reforms in relation to standards for Matters of National Environmental Significance (MNES ) (Recommendation 33(a)); and
Ensuring updates to MNES threatened species lists are undertaken simultaneously between WA and the Commonwealth to minimise the risk of proponents conforming to one set of standards or criteria and not the other (Recommendation 33(b)).
Alignment with national reform and globally significant topics will enhance WA’s profile as an investment destination through reducing regulatory complexity and ensuring best practice approaches to project assessment and development, providing benefits for proponents, the State and the economy.
Conclusion
The Vogel-McFerran Review recommendations - and the Government’s response to it - reflects a broad understanding that WA’s current environmental approval processes are not fit for purpose and are stifling investment in a wide range of projects. In addition to the adverse economic implications of lengthy approval delays, having robust and efficient environmental approval processes are key to securing domestic and foreign investment in projects that are critical to the energy transition.
Various aspects of the Vogel-McFerran Review recommendations, if effectively implemented, will likely materially reduce delays in WA environmental approvals and improve proponents’ interactions with the EPA. Indeed, additional funding announcements and the flagging of further reforms following industry consultation recognise the importance of effectively addressing the issues discussed in this article. These changes echo broader shifts at a federal level, indicating a collective Governmental commitment to enhancing environmental approval processes, as well as shifts at an international level. Ultimately, we expect any changes to WA’s environmental approval processes to not only reduce assessment timeframes and complexities, but also to align those processes with contemporary best practice.