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Focus: Environment & Planning – August 2004

Nathan Dam decision goes against Federal Minister for Environment and Heritage

In brief: Partner Ian Hodgetts (view CV)reports on a decision with implications for the identification and assessment of matters of national environmental significance.

The Queensland Conservation Council and the Worldwide Fund for Nature challenged the validity of the Federal Minister's decisions under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) in relation to:

  • which matters of national environmental significance (MNES) were relevant to the construction and operation of the dam; and
  • the appropriate level of assessment to be applied.

The full Federal Court released its judgment on 30 July.

This decision reinforces the wide application of the federal legislation and will have a significant effect on how project proponents need to approach consideration of potential impacts on MNES.

Facts

Nathan Dam is to be a privately developed dam on the Dawson River in Central Queensland. The proponent, Sudaw Developments Limited, referred the project to the then Federal Environment Minister, David Kemp, who decided that it was an action that was likely to have a significant impact on MNES and thus required approval under the EPBC Act. The relevant MNES were 'listed threatened species and communities'.

A number of submissions to the Minister suggested that irrigation of lands downstream of the dam was likely to increase nutrient concentrations and other agricultural pollutants and that these could impact on other MNES, namely, listed migratory species and the Great Barrier Reef Marine Park (a world heritage property).

In the Minister's statement of reasons, he said that 'potential impacts of the irrigation of land by persons other than the proponent, using water from the dam, are not impacts of the referred action'.

Accordingly, the Minister decided that the potential impact on listed migratory species or the Great Barrier Reef Marine Park from irrigation were not relevant and did not require assessment.

The Minister subsequently decided that the level of assessment should be by public environment report – ie something less than a full environmental impact statement.

Both decisions were found, both by the initial single judge and the Full Court, to be based on errors of law and were set aside.

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Reasons for decision

The first decision was invalidated, as the court's view was that the legislation required a broader assessment of a proposed action's impact. The EPBC Act requires the Minister to consider 'all adverse impacts' and the court held that this:

includes each consequence which can reasonably be imputed as within the contemplation of the proponent of the action, whether those consequences are within the control of the proponent or not.

The court also considered that impacts may be direct or indirect and further stated that the impact:

includes effects which are sufficiently close to the action to allow it to be said, without straining the language, that they are, or would be, a consequence of the action on the protected matter.

Clearly, cumulative impacts on those of existing activities are also relevant.

In relation to the second decision, the court found that the Minister's choosing the level of assessment was influenced by the Minister's view of the likely impacts and the MNES that are relevant – a mistake in deciding the relevant MNES would invalidate the choice of assessment approach.

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What the decision did not do

It is important to remember that the appeal was not an appeal on the merits of whether or not the dam and the irrigation impacts were significant. The court did not decide that. The error in law was the Minister's failure to consider those impacts. The court gave a clear direction that, provided the Minister considers all relevant adverse effects, it is a question of fact for the Minister to determine if there is likely to be a significant impact on MNES.

Consequences for proponents

What are the consequences for a project proponent that flow from this decision?

  • The scope of potential impacts is very wide and all impacts must be considered in deciding whether or not to refer a particular action.
  • A decision not to refer a particular action must be clearly supported by technical advice about the broad scope of impacts.
  • A proponent should not, without clear supporting evidence, limit, in any referral, the types of matters of environmental significance, in case some are later found to be relevant without similar clear technical advice.
  • With any referral, the proponent should provide evidence about the level of impact for all relevant MNES, remembering that it is a question of fact for the Minister to decide if the impacts are significant. If the Minister does not have evidence to assist with that, the decision could later be challenged by judicial review.

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The future

On a practical level, the decision is likely to complicate the process by making it difficult for proponents to identify what impacts to consider. It is also likely to make the Minister's assessment process more complicated and drawn out.

It will be some time before the ramifications of the decision are fully considered. Many scenarios may cause proponents concerns. For example, is a proponent wishing to develop a fertiliser factory, which is intended to supply fertiliser to the agricultural industry in areas where run-off may affect the Great Barrier Reef, any different from a dam operator who supplies water to the industry?

What needs to be considered by the manufacturer of any hazardous product that, if used incorrectly in specific areas, may affect MNES?

The decision also highlights the legislation's focus on the protection of environmental matters. While the EPBC Act's objects include the promotion of ecologically sustainable development, including the integration of economic, environmental, social and equitable considerations, the provisions that deal with these particular decisions do not effectively introduce any considerations other than environmental. This may make the balancing of interests, which is fundamental to sustainable development, difficult to achieve under this legislation at present.

At this stage it is not known whether or not the Federal Minister proposes an appeal to the High Court. We will keep you informed of any future developments.

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