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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Australie | Publication | décembre 2022
Earlier this year, Elizabeth Wild, Partner, and Sarah Mansfield, Special Counsel, explored the federal Government’s election promise to establish an independent federal Environment Protection Authority (EPA) and other reforms to environmental regulation in Australia. A link to the relevant podcast episode is here.
On December 8, 2022, the federal Government published its Nature Positive Plan: better for the environment, better for business (the Plan). The Plan provides a road map for the overhaul of federal environmental regulation in Australia. It details major reforms to the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and the establishment of an independent federal EPA, and is the long awaited response to the 2020 independent review by Professor Samuel (the Samuel Review) of the EPBC Act.
Whilst the specifics of how the Plan will be implemented remain unclear, businesses operating with or requiring federal environmental approvals should start preparing for environmental law and regulatory reform in 2023.
Some of the actions you can take to prepare for the reforms set out in the Plan include:
We summarise the key aspects of the Plan below.
As discussed in the August podcast, a key election promise of the Government was the establishment of an independent federal EPA.
The Plan provides further detail on its likely functions, which will include:
A federal EPA, with a mandate to actively enforce and regulate federal environmental law compliance, will mean that businesses may need to update environment assessment frameworks or amend their operations or approvals to ensure that they avoid regulatory action for non-compliance
New National Environmental Standards (NES) will be developed, which are intended to benchmark environmental outcomes. Standards will be developed for:
Existing bilateral agreements (between the federal Government and State/Territory Governments) are planned to be subject to the new NES.
The new EPBC Act approvals will require proponents to publish estimates of their expected Scope 1 and 2 emissions over the life of the project and disclose how their project aligns with Australia’s national and international climate change obligations.
The ‘National Environmental Offsets System’ is to be released imminently, and will track and report the use and delivery of environmental offsets. The offsets are proposed to not only offset environmental loss but aim to achieve overall net environmental gains.
‘Averted loss’ offsets (i.e. protecting one patch of existing habitat in exchange for clearing or loss of another) are earmarked to be largely discontinued. However, a new hierarchy for offsets is proposed to:
The ‘water trigger’, which currently applies to large coal mining and coal seam gas activities under the EPBC Act, will be expanded to include all forms of unconventional gas such as shale and ‘tight’ gas (ie low permeability sandstone reserves producing primarily dry natural gas).
Nuclear regulation will be reformed to create consistency across federal and state regulatory schemes.
A ‘nature repair market’ will be established to facilitate investment in environmental restoration projects. This market will recognise landholders who restore or manage local habitat by granting them biodiversity certificates, which can then be sold to other parties.
A new ‘Data Division’ is to be created, within the Department of Climate Change, Energy, Environment, and Water, to ensure the accuracy and accessibility of environmental data.
Regional planning agreements are being proposed between State/Territory and federal Governments. These agreements will form the basis for any applicable Regional Planning Standard which must be complied with under a reformed EPBC Act.
Conservation planning processes for listed threatened species and ecological communities under the EPBC Act will be streamlined. This may flag a ‘phasing out’ of the current conservation plans and conservation advices.
The Plan confirms that the Government will not adopt all of the Samuel Review recommendations. In particular, the recommendation to expand the standing for a limited merits review of decisions made under the EPBC Act has not been adopted.
This decision has drawn criticism from some environmental groups.
We expect the draft legislation introducing these reforms to be circulated in the first quarter of 2023. However, many of the reforms still require further development and consultation, including with States and Territories, implying that there may be extensions to the timeline.
If you have any questions about these reforms and how they may impact your business, please contact Elizabeth Wild or Elisa de Wit.
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