Of 222 projects audited, 32 were found to be potentially non-compliant, according to findings disclosed by the federal Department of Climate Change, Energy, the Environment and Water. That equates to roughly one in seven developments failing to meet the conditions attached to their environmental approvals.
The audit examined offset and land clearing related conditions for projects in the residential and commercial development, mining, and energy sectors. The department had taken some form of compliance action against thirteen of those projects, and is continuing to investigate the other 19 projects that could be in non-compliance.
Environmental offsets are meant to compensate for unavoidable environmental harm caused by approved developments. Offsets are only an option after you've tried to avoid or mitigate any impacts. Offsets do not make an unacceptable impact acceptable. Yet the audit uncovered substantial gaps in how rigorously these compensation arrangements are enforced.
Non-compliances were found in different kinds of ways, sometimes administrative, other times more significant, such as not lodging documents required around offset management plans, or requirements not being met. One particularly striking finding involved a NSW project where biodiversity offsets were not retired as required.
Perhaps more concerning than the non-compliance itself is what remains hidden. The government has not publicly released the audit report itself. A DCCEEW spokesperson told Carbon Pulse it was not a public document without elaborating further. This stands in contrast to environment minister Tanya Plibersek's public statements about the audit's importance in driving policy change.
Plibersek said the findings of the audit had led her to set up a dedicated team within the department to "proactively monitor offset compliance and projects that have been approved under national environment law". That team will eventually transfer to the new Environment Protection Australia, established under recent legislative reforms.
The audit findings arrive against a backdrop of longstanding scepticism about offset schemes. According to some experts, if one in seven are potentially non-compliant, this could be a massive underestimate of actual environmental performance, because the conditions are usually so lax that they're unrelated to environmental performance. Better enforcement is needed, but most offset conditions are so lax that better enforcement won't actually deliver better environmental outcomes.
That criticism points to a deeper structural problem. The question is not just whether developers are meeting the conditions imposed on them, but whether those conditions are ever adequately stringent in the first place. Professor Graeme Samuel's recent review of the Environmental Protection and Biodiversity Conservation Act said the offsets policy "contributes to environmental decline rather than active restoration".
The government has begun addressing this through new legislative reforms. The new laws allow the Environment Minister to make National Environmental Standards. Standards will provide guidance on how to meet the requirements of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The minister must be satisfied that a proposal is consistent with these standards for it to be approved—unless it's in the national interest. A Standard for Environmental Offsets is now being developed.
The challenge for policymakers is twofold: closing the compliance gap among current offset projects, and tightening the framework so that future offsets actually deliver measurable environmental benefits. The audit has exposed the first problem clearly enough. Whether the government will act decisively on the second remains to be seen.