travis peake biodiversity offsets presentation july 2015

OFFSETS IN THEORY & PRACTICE IMPROVING OUTCOMES & MINIMISING COSTS

Travis Peake

22 July 2015

Overview

Today we will examine:

• Theory and practice of

biodiversity offsets in

Australia

• Examine pros and cons of

various offset approaches

• Explore opportunities for:

cost minimisation and

outcome optimisation

• Identify key areas essential

for success

• Case studies of two offset

approaches

Offsets in Theory and Practice

Introduction

• Biodiversity offsets are a means of providing a temporary or permanent compensation for temporary or permanent impacts on ecological features

• Can be single species or community focussed, or ecosystem focussed

• Can comprise land purchase and management, cash payments to funds or other third parties, management actions (e.g. tree planting, pest eradication), or purchase of credits (with corresponding credit retirement being the investment in offsetting actions)

• Widespread acceptance now that offsetting is an appropriate means to address biodiversity impacts, except for cases of irreplaceability, once avoidance and mitigation measures are fully applied

• This presentation focusses on the terrestrial environment in Australia, illustrated by case studies in two jurisdictions, with specific attention placed on navigating offset pathways from a proponent’s perspective


BIODIVERSITY OFFSETTING AROUND AUSTRALIA

Biodiversity Offsetting Around Australia

• Offsetting is enforced or encouraged at all three tiers of government – focus of presentation is the Commonwealth and state/territory level

• Each jurisdiction has taken a different approach, with many similarities but also numerous points of difference

• Some jurisdictions heave leaned on others for guidance

• Bilateral agreements between Commonwealth and states/territories are changing the scene


Commonwealth

• Environmental Offsets Policy October 2012

• Environmental offsets are measures to compensate for the residual significant impacts of a proposal that remain after all reasonable avoidance and mitigation measures have been taken.

• Administrative policy, not set in legislation

• Relies on offsets assessment spreadsheet and calculator

• Advanced offsets supported


Queensland

• Environmental Offsets Act 2014 supported by regulation & policy, and Significant Residual Impact Guideline

• Offset condition may be imposed only if

"significant residual impact" on a matter of national, State or local environmental significance is likely

• Proponent-driven offset (i.e. direct offset) or "financial settlement offset" (i.e. indirect offset) or combination of both

• Proponent-driven offset may be traditional "land-based" offset or actions under a Govt-approved Direct Benefit Management Plan (DBMP) or combination of both

• Offset must be proportionate size and scale, but max ratio of 4:1

• Rehabilitation not accepted

• Advanced offsets supported


New South Wales

• NSW adopts a more holistic approach to biodiversity impacts

Not just "residual" or "significant" impacts, but all biodiversity impacts are addressed by default

• Based on a range of biometric calculator options, as well as direct negotiation of project-based offsets (for smaller projects), using NSW Govt's general biodiversity offset principles

• Advanced offsets not supported (biometric calculators inadvertently discourage this)

• Mine rehabilitation included (reduces offset needs) for Major Projects


ACT

• Environmental Offsets Policy released in April 2015, established under the Planning and Development Act 2007

• For MNES under EPBC Act and ACT protected matters

• Closely aligned with EPBC Environmental Offsets Policy, including the principles it is founded on.

• Offsets are generally only required if residual impacts are significant.

• Requires 90% direct offsets (on-ground outcome) supported by other compensatory measures

• “Advance” offsets are supported – same as Cth

• Determined by biometric Environmental Offsets Calculator (EOC) and Offset Assessment Methodology (OAM), modelled on NSW BBAM


Victoria

• Key principle - "no net loss in the contribution made by native vegetation to Victoria’s biodiversity"

• Key documents

Biodiversity Assessment Guidelines (2013)

Native vegetation gain scoring manual (2013)

• Focus on direct offsets, and liberal statement of "like for like" requirement

• Basic offset credits system - "Bush broker"

Third parties establish biodiversity credits by carrying out offset-style activities on their land, and then sell those credits to project proponents who deliver the credits to the Govt

No specific legislative backing


Tasmania

• General Offset Principles

adopt several of the key concepts used in other jurisdictions, but provide limited specific guidance

• No specific legislative framework

• Subject to significant degree of discretion


South Australia

• Very broad principles; very limited public guidance

• In most situations, approval conditions ensure that the clearing is offset by restoration work which provides a "significant environmental benefit"

• Govt is "committed to protecting native vegetation as part of a broader nature conservation strategy"

this includes the State-wide "No Species Loss" strategy

• No specific legislative framework


Western Australia

• Different impact hierarchy:

avoid, minimise, rehabilitate and offset

• Key documents

Environmental Offsets Policy (2011)

Environmental Offsets Guidelines (Aug 2014)

• Direct and indirect offsets allowed; no specific ratio

• Large degree of discretion in determining offsets

• May use Cth policy formula but with "degree of judgement"

• Some transparency provided via public register of project offset requirements


Northern Territory

• Environmental Offsets Guidelines (2013)

refer to the Commonwealth Offsets Policy

acknowledge that

NT laws make no specific provision for environmental offsets, but

offsets for a project may serve a useful purpose in establishing a "social licence to operate“

• Propose that offsets be considered in conjunction with the Govt's Guidelines on Assessment of Impacts on Biodiversity


Bilateral Agreements

• Part of Cth Government’s ‘One Stop Shop’ for environmental approvals

• Reduce duplication of environmental assessment and approval processes between the Commonwealth and states/territories

• Allow the Commonwealth to 'accredit' particular state/territory assessment and approval processes

• Action is assessed under the accredited state/territory process

• Approval bilateral agreements not yet approved by Senate


Universal Principles

Many principles are shared, explicitly or implicitly, between jurisdictions:

• Avoid – mitigate – offset hierarchy

• “Like for like”

• Offset widespread entities with rarer or higher threat level entities

• Improvement of land at offset site (e.g. increase in quality of entity, reduction/removal of threats etc)

• Replace with at least as much or usually a lot more (offset “ratio”)

• General move towards in-perpetuity protection agreements

• Increasing use of biometric or similar calculators to estimate impact, offset and cost


CASE STUDY 1 – EPBC ENVIRONMENTAL OFFSETS CALCULATOR

Case Study 1: EPBC Offset Policy & Calculator

• Policy requires application of avoid – offset – mitigate hierarchy.

• Supported by an Offset Assessment Guide and a metrics calculator.

• DoE assessment staff use the calculator (populated with the proponent’s data or inferred from proponent’s report) to inform and guide the Department’s assessment.

• Prudent for proponent to make use of the calculator early and regularly.

• Requirements for suitable offsets:

built around direct offsets (min 90%)

in proportion to level of statutory protection for affected matter

additional to what is required under other laws (though State offsets can serve as Cth offsets)


EPBC Offset Assessment Hierarchy Offsets in Theory

and Practice

EPBC Offset Calculator Key Drivers

• Key drivers of calculator comprise:

Threat status of entity

Habitat quality gain

Degree of averted risk of loss

Confidence score in both of the above

Time until ecological benefit


EPBC Offset Calculator Key Challenges

Key calculator challenges comprise:

• Lack of firm guidance (to enable consistent approaches) to scoring habitat quality, risk of loss, confidence levels

Calculations for these are intuitive even when supported by robust data

• Inconsistent approaches by Departmental staff

Some issues receive inordinate attention while others of more importance are overlooked

• Engagement by the Department with practitioners to seek feedback would help to resolve many issues

• Inconsistencies with state/territory approaches (e.g. time until improvement for habitat quality is not an issue in NSW FBA)

Likely to be resolved through Bilateral Agreements


CASE STUDY 2 – NSW OFFSET POLICY FOR MAJOR PROJECTS & FBA

NSW Assessment Approaches

• Detailed and extensive legislative and policy framework

• NSW adopts a more holistic approach to biodiversity impacts

not just "residual" or "significant" impacts, but all biodiversity impacts

• Move has been increasingly towards biometric assessments:

BioCertification Assessment Methodology (BCAM) for certain large or complex planning proposals and in Cth Part 10 Strategic Assessment

BioBanking (BBAM)

Biodiversity Offsets Policy for Major Projects – using the Framework for Biodiversity Assessment (FBA)

Environmental Outcomes Assessment Methodology (EOAM for PVPs)

• Legislative change expected in next 12 months to seek further alignment of approaches


Offset Policy and FBA Status

• 10 months into the 18 month transitional stage

• Application of the policy is compulsory

to new major SSD projects

likely to modifications to major projects

• Any perverse outcomes will be addressed during the transitional period

– but the process for doing this is unclear

• At the conclusion of the transitional period it is intended that the policy

will be implemented by legislation

• Permits use of rehabilitation on mines to reduce offset needs

• Enables offsetting through:

Use of land-based offsets secured with BioBanking agreement

Purchase of credits from other Biobank sites

Direct payment into Offset Fund (under development)


NSW FBA Drivers (1)

• Key drivers:

Impacts are calculated by the FBA calculator and include un-listed (non-threatened) vegetation types and habitats, including derived native grasslands.

Relies on Biometric formulae – based on a 'threatened species offset multiplier’.

Relies on BBAM for determination of credits at offset sites.

Indirect impacts must be documented and minimised.

Introduces minimum condition thresholds to be met before offsetting is required.

For an offset site often more credits are obtained through restoration of lower quality habitat, rather than through protection of high quality habitat.


NSW FBA Drivers (2)

• Certain matters require “further consideration” such as impacts that might cause the extinction of a species within a region.

• Enables the use of mine rehabilitation for Major Projects relating to mining – probable limit about 20 per cent.


Threatened Species Multipliers

• The FBA uses Threatened Species Multipliers (TSMs) or TG scores to calculate the number of credits for species credit species

• TSMs and TG scores are

the ability of a species to respond to improvement in site value or other habitat improvement at a BioBank site with management actions. Based on an assessment of effectiveness of management actions, life history characteristics, naturally very rare species, and very poorly known species.

• TSMs or TG scores drive very large credit loads for species credit species that occur in high numbers and have a high TSM (or low TG score)

• Species credits can account for ¾ of the total credit load of a project

• Offset ratios can be calculated for each TSM or TG score setting


TG Scores and Offset Ratios

• Offset ratios can be calculated for all possible TG scores


0

2

4

6

8

10

12

14

16

0.1

0.1

25

0.2

5

0.3

0.3

25

0.3

5

0.3

75

0.4

0.4

25

0.4

5

0.4

75

0.5

0.5

25

0.5

5

0.5

75

0.6

0.6

25

0.6

5

0.6

75

0.7

0.7

25

0.7

5

0.7

75

0.8

0.8

25

0.8

5

0.8

75

0.9

0.9

25 1

Off

set

Rati

o

TG Score

FBA – Background Databases

• Background databases include:

Threatened Species Profile Database (TSPD)

VIS Classification Database (includes benchmarks settings)

• Database settings have a strong influence on the number of credits

Many settings require review, some settings are incomplete

• Recommend

• OEH undertake regular and transparent reviews of settings

• Industry provide justification for setting changes on a project-by-project basis

Industries should and can have input into databases to help refine them


FBA Problems

Problems with FBA:

• Reliance on databases and data that do not have clear and transparent scientific approaches to listing and reviewing, and no public exhibition steps

TSM (TG) scores are potentially more powerful than threatened species listing but undergo no scrutiny or public documentation

• EECs are of reduced relevance — therefore reduces relevance of objects of TSC Act and purpose of NSW Scientific Committee in Major Project sense

• Disconnect between seven part test (under EP&A Act) and policy (to be addressed through future legislation amendment)

• Immature market and likely high costs of credits


MAXIMISING OUTCOMES

Planning and Communication

• Early planning concurrent with other project planning

• Be aware of pathways available and pros and cons of each

• Good interdisciplinary understanding and interdependencies e.g. impacts of water draw-down on GDEs, blasting impacts etc

• Avoid – mitigate – offset pathway, focus on the former as much as possible to reduce need for offsets

• Early and continuous engagement with authorities

• Advanced Offsets and project pipeline needs

• Strategic Assessments where available

• Use of bilateral agreements where appropriate

• Strong link between approvals and operational management teams


Field Surveys and other Preparatory Actions

• Field survey timing and techniques:

Ensure impact site matters adequately addressed at right times

Maximise threatened species recording chances at offset sites

• Working with other proponents to:

Develop monitoring and benchmark networks to continuously feed in to databases and certainty for future project offset needs

Potentially reduce data collection needs depending on site proximities

• Collecting baseline data for advanced/advance offsets


Offset Site Management

• Offset site management is often focussed on a certain level of gain or improvement

Where this can be exceeded it should be documented, calculated and committed to

Under certain jurisdictional policies this additional improvement will be able to be applied and used in an offset context

• Specific management actions to increase gains could include:

Nest box installation to increase tree hollow density

Planting of species to achieve predicted gains in diversity and cover

Positioning of logs or hollow bearing trees in offset areas

• Monitoring plots should be positioned in areas that will respond to management


Maximising Outcomes – Additionality

• Additionality at State/Territory level:

use of existing offsets whose potential is not fully realised

will vary from one jurisdiction to another

• Additionality between State and Cth offsets – policies typically allow for overlap between these where appropriate and timed correctly, i.e. part of same action, but not as part of different actions


Mine Site Rehabilitation

• Mine site rehabilitation may be used to reduce offsetting obligations

for a project in some jurisdictions

• In WA rehabilitation forms an important component of offsetting

hierarchy while in others such as Queensland it cannot be considered

• Successful rehabilitation achieved in the short term will help to set

benchmarks for future rehabilitation gains


MINIMISING COSTS

Proponents

• Nature of surveys – timing, concurrency with other steps, early start

• Sharing information – from previous monitoring/consultants, with agencies to seek early feedback on rigour

• Strong internal links between internal approval and offset management teams are required to ensure that predicted gains are achievable

• Co-location with other offset requirements e.g. archaeological/cultural

• Focus only on relevant matters (while still having regard to others for context) e.g. projects affecting only Commonwealth land

• Mid-range quality offset sites will likely represent the best balance of the effort and cost required to achieve the necessary gains in site attributes

• Working with other proponents to share load and reduce unit costs

• Offset bank – establish in appropriate areas based on project pipelines and then not at whim of credit market


Regulatory Authorities

• Ensure robust classification and mapping products available and updated

• Databases reviewed and updated regularly

• Transparency and communication around changes is essential

Including matters that should seek public comment

• Provide adequate support services including appropriate training in offset assessment packages


KEY INGREDIENTS REQUIRED FOR SUCCESS

Key Ingredients Required for Success (1)

Key ingredients will vary from one jurisdiction to another, and will be

affected by the nature and location of the project, approval assessment

timeframe and nature of offsetting required. Cam include:

• Early planning

• Understand your approval pathway options or contingencies

• Advance/advanced offsets where available, and use of additionally

opportunities

• Offset land banks

• Instil confidence in authorities

Demonstrating good previous offset and rehabilitation outcomes

Undertake studies to meet relevant guidelines and no less

• Focus on restoration of appropriate environmental matters or

elements

Key Ingredients for Success (2)

• Liaise early and regularly with authorities

• Ensure strong connections within large corporations – collective

memory – between approval and implementation teams

• Identifying perverse or incorrect settings driving inappropriate

offsetting outcomes

• Engage consultants who can problem-solve and don’t just tick boxes!

• Follow-up on implementation plans, monitoring, and apply lessons to

future projects.



Thankyou Acknowledgement:

Nick Thomas, Clayton Utz, for some nationwide offsets material

Travis Peake

Practice Leader Ecology

Umwelt (Australia) Pty Limited

0408 115 679

[email protected]

travis peake biodiversity offsets presentation july 2015

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