Kathryn Kelly 9 April 2014 The Secretary Senate Standing Committee on Environment Inquiry into Environmental Offsets PO Box 6100 Parliament House Canberra ACT 2600 Senate Inquiry into Environmental Offsets Thank you for the opportunity to submit the following to the Senate Inquiry into Environmental Offsets. My comments are written primarily using the Alpha coal mine project a case study. The Alpha coal mine is in the Galilee Basin, Central Queensland, north‐west of the town of Alpha. I was an objector to the Alpha coal mine project in the Land Court in Queensland and some of the information in this submission was derived through preparation and participation in that process. The Alpha case provides a valuable case study of the use of offsets as a justification for federal approval of a project. The judgement for the Alpha mine was delivered on 8 April 2014, giving approval to the mine conditional on the grant of a water license taking into account the precautionary principle. I refer to the relevant terms of reference (in bold) which I will address with my comments, as follows: “The history, appropriateness and effectiveness of the use of environmental offsets in federal environmental approvals in Australia, including: • the principles that underpin the use of offsets; • the processes used to develop and assess proposed offsets; • the adequacy of monitoring and evaluation of approved offsets; • arrangements to determine whether promised environmental outcomes are achieved over the short and long term; and • any other related matters That in conducting the inquiry the committee consider the terms of reference in (1) with specific regard to, but not restricted to, the following projects: • Whitehaven Coal’s Maules Creek Project; • Waratah Coal’s Galilee Coal Project; • QGC’s Queensland Curtis LNG project; • North Queensland Bulk Port’s Abbot Point Coal Terminal Capital Dredging Project; and • Jandakot Airport developments. I contend in my submission that offsets do not and cannot achieve their stated aim of compensating for residual (or non‐residual) adverse impacts on the environment from large‐ 1 scale projects and that their fundamental premises are flawed for a number of reasons detailed in the submission. Background The federal approval for the Alpha mine was given by then Environment Minister, the Hon Tony Burke, on 23/8/12 under sections 130(1) and 133 of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) in relation to the following sections: World Heritage (s12 & s15A) National Heritage (s15B & 15C) Listed threatened species and communities (s18 & 18A) Listed migratory species (s20 &20A). The World Heritage and National Heritage sections are relevant to the Alpha project, as the Alpha project included a 495km rail line from the project through the Bowen Basin and through the Caley Valley Wetlands at Abbot Point on the Great Barrier Reef. The Caley Valley Wetlands are a nationally significant wetland. The project is majority‐owned by Indian company GVK with Hancock Coal Pty Ltd (HCPL) the 21% minority owner. Sections 24D and 24E of the Act (the ‘water trigger’) were adopted as an amendment to the Act in June 2013 and were therefore not in place at the time of the Alpha project. If it goes ahead, the Alpha project would be equal to the largest coal mine in Australia at the present time and produce 30m tonnes of coal per annum. There is some question at this time as to whether the project is economically viable. The EPBC Act approval for the Alpha project is deficient in that the Act does not take into account the impacts of global warming which is exacerbated by the coal produced and burned from these mines resulting in significant greenhouse emissions. The natural state of coal at the mine is as a carbon stock. Destroying the carbon stock at coal mines inevitably leads to serious, widespread and irreversible harm globally and on the Australian environment. There is a direct causal relationship between mining black coal, that is, destroying the stable carbon stock, and the unavoidable release of greenhouse gas emissions to the atmosphere. This is not a question of where the emissions take place or where they are reported. It is the action of destroying the carbon stock which will inevitably lead to serious, widespread and irreversible harm, both in Australia and globally. The environmental impacts of large­scale coal mines can in no way be considered residual ‐ this is a major consideration for the Inquiry. I do not argue that offsets should be imposed to take account of this serious omission in relation to environmental conditions on the projects. Rather, I think these impacts are so serious that they should preclude the approval of new coal mines. There are alternative technologies and power systems now available to provide electricity for Australia and other countries, such that coal for power must be phased out. Ecological Ponzi scheme Further, I argue that offsets are not appropriate in relation to the environmental impacts of large‐scale mining or CSG projects. I see offsets as an ecological Ponzi scheme, which borrows 2 from the future of our biodiversity, leading to a serious and irreversible situation of ‘extinction debt’1. International agreements and environmental policy relevant to this case study include: 1. The United National Framework Convention on Climate Change, which asks developed countries to shoulder the burden of reducing greenhouse emissions. 2. The United Nations Convention on Biodiversity, is a relevant international agreement which Australia has signed and ratified as is the Convention Concerning the Protection of the World Cultural and Natural Heritage (World Heritage Convention). 3. In Queensland, the Great Barrier Reef and the Wet Tropics are on the World Heritage list. 4. The National Strategy for Ecologically Sustainable Development The National The Core Objectives of the Australian government’s National Strategy for Ecologically Sustainable Development are: • To enhance individual and community well‐being and welfare by following a path of economic development that safeguards the welfare of future generations • To provide for equity within and between generations • To protect biological diversity and maintain essential ecological processes and life‐support systems. Two of the Guiding Principles are: • Decision making processes should effectively integrate both long and short‐ term economic, environmental, social and equity considerations • Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation These Core Objectives and principles have particular relevance as biodiversity and the ecological processes and life support systems (such as habitat and water) which support biodiversity are a fundamental component of equity for future generations. If species become extinct, they are extinct forever. TOR: The appropriateness and effectiveness of environmental offsets in federal approvals: • the principles that underpin the use of offsets; The Introduction to the Commonwealth’s Environment Protection and Biodiversity Protection Act 1999 Environmental Offsets Policy (October 2012) states “Offsets are defined as measures that compensate for the residual adverse impacts of an action on the environment”. However ‘residual adverse impacts’ are not defined. The climate change and biodiversity losses resulting from large‐scale coal mine projects can be in any way considered as ‘residual’. This is a fundamental flaw of the offsets policies, both at federal and state levels. Offsets will not 1 This is the concept that species become extinct because of human actions taken many years previously. http://theconversation.com/extinction‐just‐how‐bad‐is‐it‐and‐why‐should‐we‐care‐13751. 3 compensate for the (non‐)’residual’ adverse impacts (federal and state policy), nor ensure ‘no net loss’ of biodiversity (QLD policy). [The Qld Biodiversity Offset Policy (QBOP) purpose is: The purpose of this policy is to increase the long-term protection and viability of the state’s biodiversity where residual impacts from a development, on an area possessing State significant biodiversity values, cannot be avoided. The policy provides the framework to ensure that there is no net loss of biodiversity. Overall the Qld policy provides seven policy principles which are similar to the Commonwealth principles – see Appendix B.] The Commonwealth policy provides 10 policy principles as follows: Box 1: Offset Principles Suitable offsets must: 1. deliver an overall conservation outcome that improves or maintains the viability of the aspect of the environment that is protected by national environment law and affected by the proposed action 2. be built around direct offsets but may include other compensatory measures 3. be in proportion to the level of statutory protection that applies to the protected matter 4. be of a size and scale proportionate to the residual impacts on the protected matter 5. effectively account for and manage the risks of the offset not succeeding 6. be additional to what is already required, determined by law or planning regulations or agreed to under other schemes or programs (this does not preclude the recognition of state or territory offsets that may be suitable as offsets under the EPBC Act for the same action, see section 7.6) 7. be efficient, effective, timely, transparent, scientifically robust and reasonable 8. have transparent governance arrangements including being able to be readily measured, monitored, audited and enforced. In assessing the suitability of an offset, government decision-making will be: 9. informed by scientifically robust information and incorporate the precautionary principle in the absence of scientific certainty 10. conducted in a consistent and transparent manner. While these principles for environment protection are generally appropriate, they are not met by the adoption of offsets to compensate for environmental damage from a project. In particular, for example: No. 4. be of a size and scale proportionate to the residual impacts on the protected matter Here the issue of ‘residual’ impacts is critical.