Cost recovery under the Environmental Protection and Biodiversity Conservation Act 1999 Western Power submission

Transcription

1 Cost recovery under the Environmental Protection and Biodiversity Conservation Act 1999 Western Power submission 31 October 2011

2 Document release information Client Project name Document number Document title Revision status 1 NA Environment Protection and Biodiversity Conservation Act 1999 Reform Package Document number Cost Recovery under the Environment Protection and Biodiversity Conservation Act 1999 Western Power submission Document prepared by: Western Power ABN Address Prepared by: Reviewed by: Tristy Fairfield Roger Fletcher Copyright of Western Power Any use of this material except in accordance with a written agreement with Western Power is prohibited.

3 Cost Recovery Under the EPBC Act 1999 Western Power submission October 2011 Table of contents 1 Introduction 1 2 Cost Recovery General 1 3 Cost Recovery Environmental Impact Assessments 1 4 Cost Recovery Strategic Assessments 2

4 Cost Recovery under the EPBC Act October Introduction Western Power appreciates the significant burden that administration of the Environmental Protection and Biodiversity and Conservation Act 1999 creates for the administering agency. Western Power supports the concept of cost recovery in principle, in certain situations, however has several concerns related to the proposal in its current form. These concerns are addressed in this submission. 2 Cost Recovery General 2.1 Disincentive to referral While Western Power supports the concept of cost recovery in principle, it is anecdotally known that not all projects that impact on Matters of National Environmental Significance (MNES) are actually referred under the current regime. Western Power is concerned that imposition of cost recovery will act as a further disincentive to referral, particularly for low value projects. In addition to the reform benefits articulated in the consultation paper, Western Power would expect that if cost recovery were implemented, that clear methodologies will be used in the review process to assess whether the benefits are being realised. Western Power would expect that the quality of document reviews and management of the approval process would improve as a result of cost recovery. This would include shorter timeframes. Imposition of cost recovery should lead to turnaround times less than the statutory maximum, rather than only enabling statutory maximum timeframes to be met. Cost recovery fees should be reduced or waived in cases where the proponent is delivering essential services and the imposition of cost recovery will in fact be borne by consumers of essential services. 3 Cost Recovery Environmental Impact Assessments The imposition of cost recovery for referral and environmental impact assessment (EIA) has significant implications for Western Power in keeping the cost of delivering essential services as low as possible. Western Power is principally concerned with the following aspects of the proposed EIA cost recovery model: 1. Flat rate referral fee - the application of a flat rate referral fee is inequitable given the large difference in ongoing revenue for different proponents. The size of the proposed referral fee is such that it will provide a disincentive to referral for low value projects, thereby undermining the effectiveness of the process. 2. Flat rate Management Plan assessment fee Environmental Management Plans vary in size, quality and effectiveness. While supportive of a process which differentiates charges on the basis of the number of MNES impacted, some manner by which time spent on assessment, rather than the number of documents assessed, is required. 3. Flat rate annual monitoring fee Western Power builds, owns and operates linear infrastructure which has minimal ongoing environmental impact following the Page 1

5 Cost Recovery under the EPBC Act October 2011 construction phase. It is therefore inequitable for projects such as this to pay the same monitoring fees as projects with ongoing impacts such as mine and port operations. 4. Additional fees due to information quality - assessment of proposals with poor quality, insufficient or misleading information should not be undertaken. While the additional assessment resources allocated would be paid for by the proponent under this proposal, the use of SEWPAC resources for these proposals would be detrimental to those proponents who submit quality referrals. Proposals which do not meet certain quality standards should be returned to the proponent to undertake the necessary additional work. 5. Transparency of estimated costs Western Power considers that a far higher level of transparency regarding the cost estimates is required. These should be set out similarly to consultant s estimates, with the hours/ level of seniority assumed for each type of assessment, and including the assumed charge per hour of each. Fees commensurate with consultants should not be applied, given that there is no competitive process for this work and the department does not need to cover overheads associated with unsuccessful tenders. 6. Business Improvement Charge Western Power does not support the imposition of a business improvement charge. Implementing reforms, improving services and processes are business-as-usual activities for government agencies and should not be funded through a cost-recovery mechanism. Western Power is supportive of: a cost recovery model that differentiates between essential service provision and other activities a cost recovery model that rewards proponents that submit proper referral information and does not accept proposals which are incomplete, have insufficient information or are misleading costs based on actual time spent, with hours recorded by assessing staff costs based on number of MNES impacted, scale of projects, revenue expected by the proponent additional costs for project changes and changes to conditions. 4 Cost Recovery Strategic Assessments Western Power supports the government s commitment to increasing the use of strategic assessments where appropriate to deliver better outcomes for the environment, as well as providing a reduction in regulatory burden for stakeholders. Consequently, it is crucial that the cost recovery model applied to strategic assessments does not create an incentive to pursue project-by-project approvals rather than a strategic assessment. The consultation draft proposes (Table 5.1) that State Corporations would be subject to cost recovery for strategic assessments on the basis that they are likely to be commercial entities in a potentially competitive environment. This does not consider the cases of natural monopolies which are not in a competitive environment and where the costs are passed through via the regulatory regime, or providers of essential services such as water and electricity. Page 2

6 Cost Recovery under the EPBC Act October 2011 Given the limited application of Strategic Assessments under the EPBC Act to date, an adaptive approach will need to be taken to cost recovery, whilst maintaining equity amongst proponents. An initial review period of shorter than five years in respect of the application of cost recovery to strategic assessments should be considered. Page 3