Friends of Grasslands
supporting native grassy ecosystems
PO Box 440
Macquarie ACT 2614
Re: Nature Repair Market Bill 2023
Friends of Grasslands (FOG) is a community group dedicated to the conservation of natural temperate grassy ecosystems in south-eastern Australia. FOG advocates, educates and advises on matters to do with the conservation of native grassy ecosystems, and carries out surveys and supports and undertakes on-ground work on off-reserve sites. FOG is based in Canberra and its members include professional scientists, landowners, land managers and interested members of the public.
There is an urgent need to restore high conservation value places like remnant grassy ecosystems, so FOG is delighted the Government is eager to support and enable nature repair at scale. We believe there is a great opportunity provided by the Nature Repair Market (the Market) to better manage and protect our diminishing biodiversity. We support fully the opportunity to protect and manage biodiversity across the landscape, not relying solely on public or private reservation options.
As the advocates for conservation of some of Australia's most endangered ecological communities - native temperate grasslands and grassy woodlands - we welcome any measures that advance conservation of such ecosystems. Grasslands and grassy woodlands are the acid test of whether an ecosystem conservation measure can be effective, as they are fragmented, hard to identify to the unknowing, can be destroyed through otherwise innocuous activities such as over grazing, and require active management.
However, we cannot see in this draft Bill any prospect that threatened grasslands would be better conserved. Therefore, FOG cannot support the above Bill in its current form. We believe that there are multiple ways the Bill will fail to achieve the desired outcomes and urge these matters be reviewed to achieve successful implementation of the Bill. In summary:
1. The NP Plan makes clear the Government is aware of the need for development of the Market as part of a suite of activities needed to address the biodiversity crisis. The NP Plan acknowledges the urgent need to strengthen and enforce environment protection laws. In FOG’s view, those amendments are the most important changes needed; they should be progressed first.
2. As drafted, too much is left to be detailed in legislative instruments.
3. In the absence of the related Bills, standards, Market rules and model methodologies and biodiversity assessment instruments etc, FOG has found it difficult to comment on the Bill.
We note the absence of a comprehensive and strategic policy framework. Throughout this submission, gaps not properly addressed in the Bill or its Explanatory Memorandum (EM) are highlighted. We are not the only entity noticing this need.
Pertinently, there has been no attempt to first agree, through National Cabinet, on a broadly applicable minimum standard for the management of biodiverse land, rivers or inland waters. FOG thinks of this standard as a ‘general duty’ to manage biodiversity well. It manifests when, for example, a landholder is lawfully required to remove a weed or feral animal from land they control. In the absence of such a standard, no-one will know – including the Regulator – whether projects in different biomes and ecosystems, and in different jurisdictions, go beyond, and if so how far they go beyond, minimum standards and existing legal obligations. These are additionality and proportionality problems, respectively.
4. The Bill does not deliver the protection, in perpetuity, of project areas. There will be no obligations for project proponents (or any other person) in respect of a project once its temporary ‘permanence period’ ends. Unless a second legal mechanism provides permanent protection, every project area will again be at risk of loss. Attachment A provides more detail about this concern.
5. If protecting places via state and territory mechanisms is (or is perceived to be) difficult, Environment Ministers have the power now to protect biodiversity in the Australian jurisdiction by executing simple, secure and (when they need to be) permanent Conservation Agreements under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). To arrest the decline in Australia’s environment and ensure gains made in the Nature Repair Market (Market) are captured, absent permanent protection via the Bill, every project area should be protected in perpetuity by an EPBC Act Conservation Agreement. The desired outcomes of Nature Repair Market are weakened by not implementing existing mechanisms to protect biodiversity across the landscape.
6. It is anticipated the Bill will be used to enable the acquittal of offset obligations; however, the Bill locks in an inability to deliver compensation that will be temporally adequate whenever the impacts at an impact site are serious and irreversible.
7. If the Market is used to offset and thus facilitate development elsewhere, the Market will lack integrity. In addition to enabling nature’s destruction, absent in the Bill is the requirement that compensation delivered through the Market will be ‘like for like'. As a result, any suggestion outcomes will be nature positive is without foundation.
8. The outcomes sought in the Bill are unclear. For example:
a. The Bill provides for ‘averted loss’ scenarios, i.e., project areas may be protected but not enhanced. However, the Bill does not require proof that any project area to be protected, only, is under threat. The failure to require this proof is inconsistent with a commitment in the Nature Positive Plan.
b. The Bill uses the term ‘enhancement’ of biodiversity in native species; in restoration parlance, the term conveys a limited meaning. Either the limit on outcomes expected (if a limit is intended) is not explained, or clause 3(a) is ambiguous.
9. The Bill does not include or reference headline indicators, nor does it establish a biodiversity outcomes monitoring framework comprising basic data collection methods and standards for each indicator that will ensure consistent and meaningful quantitative analysis can be undertaken at broad scales.
10. The Bill does not address additionality and proportionality problems. In the absence of a strategic framework agreed with the states and territories, the Regulator will not know whether projects in different biomes and ecosystems, and in different jurisdictions, go beyond, and if so how far they go beyond, minimum standards and existing legal obligations.
11. No modelling has been commissioned. Demand is uncertain.
12. There are provisions in this Bill that unnecessarily constrain any citizen’s capacity to track the progress of registered biodiversity projects. Several provisions in the Bill fail to ensure appropriate degrees of transparency and accountability.
Attachment B includes more detail about specific issues raised above. Attachment C is a dot point summary of important points raised by others. Attachment D is suggestions for specific amendments to the Bill. FOG recommends full consideration of all these matters.
Thank you for the opportunity to comment on this Bill. We would welcome the opportunity to meet to discuss our concerns.
Friends of Grasslands Inc
1 June 2023
Attachment A: Permanent protection for project areas
In applying Standard 1.7.2 of the National Standards for the Practice of Ecological Restoration in Australia (National Restoration Standards), there is a need to consider the “potential for ongoing prevention of impacts and maintenance on [any project area] after completion of [any registered biodiversity project] to ensure that the [project area] does not regress into a degraded state”.
In the absence of permanent protection, gains made through the Market will once again be at risk of loss, whether through a clearing event or over time through a return to inappropriate management.
Our concerns are amplified by the Government’s intention to enable offset obligations to be acquitted through the Market. The job of effecting repairs to Australia’s environment is made more difficult with every decision to approve further destruction. A more efficient approach would be to actively prevent and to stop approving further loss that requires compensation via offsets.
In regard to offsets, FOG recognises there is detail still to come through offset standards and amendments to the EPBC Act; however, under the Bill, the maximum period of protection and management to be delivered for any registered biodiversity project’s project area is 100 years.
This construct ignores a fundamental offset principle ... that an offset must compensate for an impact for the full duration of that impact. Under the Bill, i.e., unless standards require otherwise, it is possible irreversible loss could be taken to be offset by protecting and managing a project area/ offset site for as few as 25 years.
Embedding a maximum duration on a project area/ offset site’s protection and management ensures inadequate compensation and ongoing decline. If a protected matter suffers irreversible impact, the principle is its offset must be securely protected and managed for conservation, forever.
The loss of integrity that will occur if offset obligations
are acquitted in the Market is palpable.
Nature positive outcomes will be so much more difficult to achieve when any forward step follows residual significant impacts.
If, as the Nature Positive Plan (NP Plan) suggests, protecting places properly with state or territory legal mechanisms is (or is perceived as) too costly, time-consuming and difficult, then the Government should use the solution readily available. Environment Ministers have the power now to protect biodiversity in the Australian jurisdiction by executing simple, secure and (when they need to be) permanent Conservation Agreements under Part 14 of the EPBC Act.
Attachment B: Specific matters
Lack of formal (legal) protection for project areas
Inexplicably, the EM states “Many of the projects delivered through the [Market] are expected to deliver improved outcomes in perpetuity by protecting the improved habitats, and this will support the Government’s commitment to protecting 30% of Australia’s land by 2030”. This is overreach:
- FOG does not think project areas should be recognised as Other effective area-based conservation measures (OECM), unless the guidelines are changed to enable permanent protection mechanisms to be implemented. This is because their temporary protection does not satisfy the principle (expected) that their values “are to be maintained in the long-term”. In a previous response on consultation on the draft principles for OECMs, FOG has stated: FOG does not believe that recognition in itself of an area as an OECM will secure important biodiversity values. The States and Territories should be encouraged to introduce protection mechanisms for sites that meet OECM criteria where they cannot become formal protected areas and to provide support in terms of resources and advice to landholders.
- Of concern is that, if a project area is recognised as an OECM and for a period it contributes toward meeting Australia’s 30x30 target, it means the project area is not protected beyond its ‘permanence period’. That is not in perpetuity protection.
- No evidence has been provided demonstrating the states and territories have been asked, let alone agreed, they will consider acquiring and adding enhanced project areas to their protected area estates.
It would make sense to confine expectations for this Market to the likely achievement of Target 2 of the Montreal-Kunming Global Biodiversity Framework (GBF); that is a relevant target.
Object 3(a) is problematic
The Object at cl. 3(a) of the Bill has a potential to confuse and limit what is possible:
- The name of the Bill includes ‘repair’, and the international obligations addressed by the Bill–Goal A and Target 2 of the GBF–each refer to ‘restoration’.
- ‘Enhancement’ of biodiversity in native species is not a term that is familiar or meaningful to most environmental managers.
Ecologically meaningful terms should be used and defined. The terms ‘repair’ or ‘restore’ should be used instead. It is not stated in the Bill or the EM why the term ‘enhancement’ is used. FOG is concerned the term may be intended to convey a specific, limited meaning; if so, both the limit and the lack of transparency about the intention are problematic:
- ‘Enhance’ is a term used in the National Restoration Standards where it has a limited meaning, i.e., it is part of the second step ‘rehabilitation’, only (Figure 1). Restoration is clearly distinguished; it means something else.
Figure 1: Ecological restoration in degraded urban and production landscapes
Read with the definition of ‘biodiversity outcomes’, Object 3(a) indicates very clearly that project areas may be ‘protected' but not ‘enhanced’, i.e., the Bill is foreshadowing the registration of biodiversity projects that may involve averting loss but no nature repair. The Nature Positive Plan explains averted loss scenarios will only be contemplated where the places to be protected are under threat. The Bill does not require a standard of proof that project areas to be protected, only, must be under threat.
The focus in Object 3(a) on biodiversity “in native species” is also not appropriate. Adopting for this purpose the wording of cl. 3(a), Australia’s obligation under the GBF is to enhance and protect much more than biodiversity ‘in native species’; both Goal A and Target 2 refer to restoring ecosystems.
Consistency and integrity: biodiversity outcomes monitoring, measurement, reporting & auditing
The EM asserts “the Bill would: (among other things) create a nationally consistent framework to describe and measure biodiversity outcomes”; however, the Bill per se provides no such assurance:
- The DCCEEW has acknowledged biodiversity outcomes measurement will be difficult to achieve as there is no accepted metric.
- The Bill does not define how outcomes to be achieved will be represented on biodiversity certificates.
- The Bill does not require the Minister to be satisfied consistency will be achieved when making a Biodiversity Assessment Instrument.
The monitoring and reporting of biodiversity outcomes will be fundamental to the Market’s integrity, i.e., integrity will flow from the consistent demonstration of biodiversity outcomes that are real, additional and verifiable. Other forms of monitoring will also be important. For example, compliance monitoring and reporting must be high-quality. It would be useful to do some inputs monitoring and reporting, to know what costs are incurred by project proponents; if accurate, these reports would help in any evaluation of the costs and benefits of the Market.
For efficiency and effectiveness, now is the time for the Australian Government to take the time to confirm headline indicators and establish, in legislation, a biodiversity outcomes monitoring framework comprising basic data collection methods and standards for each indicator that will ensure consistent and meaningful quantitative analysis can be undertaken at broad scales:
- The Market will be a world first, and the Minister has very big plans for it.
- The Kunming-Montreal Global Biodiversity Framework (GBF) adopted
on 19 December 2022
“is accompanied by a detailed monitoring framework comprised of a set of agreed indicators for tracking progress towards the Goals and Targets of the Framework”.
- On 21 October 2022, Environment ministers agreed that “In recognition of the scale and urgency of environmental challenges [to, among other things] “work together to make nature positive investments easier, focusing on a consistent way to measure and track biodiversity”.
- The Taskforce on Nature-related Financial Disclosures (TNFD), part funded by the Australian Government, will publish its risk management and disclosure framework in September 2023 “ready for market adoption”.
However, the strategic thinking that is needed, and that is possible now because of three developments listed in the previous paragraph, is not happening. Having regard to:
- headline indicators agreed under the GBF monitoring framework,
- Australia’s different biomes and ecosystems, and systems in place within and across jurisdictional boundaries and
- what the business and finance sectors want and will be required to disclose in reports,
what is needed before the Bill is finalised is a transparent consideration of metrics for each indicator, and methods and standards for each. The costs, benefits and risks of each option need proper consideration.
Instead, we have none of that, and since the Exposure Draft was released, cl. 104A has been added to the Bill. On that provision, it is understood an increased reliance on technology like remote imaging over the norm of site-based monitoring of relevant parameters is potentially positive (the monitoring of poor proxies can result in considerable amounts of unusable and unused data). However, such changes are also fundamental, affecting who collects, what data, how data will be considered etc.
Right now, the lack of reference in the Bill to headline indicators, the lack of basic data collection methods and standards, and the lack of a framework controlling what ‘alternative assurance’ will be accepted, all invite future inconsistency.
Attachment C: Other matters
FOG has reviewed comments on the Exposure Draft of the Bill, literature, Twitter (NatureRepairMarket#) and Hansard from Senate Estimates on 23 May 2023. Important notes not covered above on ‘other matters’ include:
- Demand and supply drivers
o There is insufficient evidence of the drivers of, and of the levels of supply and demand that are likely to eventuate in, the market.
o The Government did not commission any modelling of market demand (PricewaterHouse-Coopers’ estimated financial flows pro-actively, after a conversation with an official from the DCEEW).
- Integrity, including in Administration:
o The DCCEEW has noted “All the issues around integrity and confidence are absolutely key”.
o According to the Nature Finance website:
Building high-integrity, high-performing biodiversity credit markets requires a radical level of transparency and accountability, accreditation for traders, that affected voices are heard, interested stakeholders visible, minimum price floors established and international governance arrangements upgraded.
Nothing about the Bill guarantees a high standard of transparency. Accreditation of traders is not contemplated. And so on.
o Market experts have noted:
Projects should ... generate credits as a result of measured and verified per-unit enhancement and/or protection of biodiversity”, i.e., not what is projected ...
Biodiversity certificates will need multivariate approaches and metrics in their monitoring and reporting schemes which report on ecosystem integrity. ...
o There is a need to: separate the administration (e.g., the issuing of certificates) from the regulation of the Market, to minimise potential conflicts; and consider whether the Clean Energy Regulator has relevant expertise.
o An enormous bureaucracy will be required with significant transaction costs. Yung En Chee from the University of Melbourne notes:
If they are to succeed, these kinds of schemes must be legitimate. To make these credits worthy of investment and tradeable, you need a governance framework, measurement systems, certification, registration, contracting, trading, monitoring, reporting, accounting, auditing, and a bureaucracy for administering, consulting and advising on all of it.
- Compliance and enforcement
o There is potential risk that some landholders may deliberately clear or degrade the environment to generate an economic benefit through participating in the Market”.
o The Bill proposes insufficient safeguards in case outcomes fail to eventuate.
o Except for landholders managing offset lands, landholders who are already legally obliged by covenants (or similar) to manage for conservation must be able to participate in the Market.
- Strategic ‘fit’
o Progressing the Market without clearer understanding of how it will intersect with the EPBC Act reform process only adds uncertainty.
o The Bill does not account for each state and territory’s legislation, priorities and interests. The Register will not, e.g., make it easy for the investors and others to discern how a registered biodiversity project ‘fits’ within agreed national, state, territory, regional or local conservation priorities.
- Public consultation
o A formal mechanism is needed that will allow interested parties to make representations to the Regulator.
- Open standing
o The Bill gives standing to enforce the Act to one entity only, the Chair of the Regulator. Standing provisions should be open.
Attachment D: Suggested amendments to the Bill
cl.70(2) – To enable the tracking of offset obligations acquitted in the
Market, in particular
‘like for like’ obligations, the Bill should be amended to require that, before the Regulator issues a Biodiversity Certificate, the Regulator must:
a. ask the EPA to confirm the list of protected matters (if any) that exists in a project area, and for each protected matter its protected matter attribute(s) and
b. hold confirmation from the EPA that the Biodiversity Certificate shows the project area’s ‘protected matter attribute(s)’ (if any).
2. cl.162(1)(c), cl.164(1)(e), cl.164(2)(e) - Rather than requiring it in subordinate instruments, the Bill should be amended to require that a comprehensive range of information be available on the Register. The information published on the Register for each registered biodiversity project should (among other things) include, for every Biodiversity Certificate approved for deposition with the Regulator to acquit an offset obligation, whether a certificate acquits an offset obligation for:
a. an action with a serious and irreversible impact, and
b. a requirement imposed at:
i. the federal level, or
ii. the state or territory level, or
iii. more than one level.
3. cl. 173 - What–precisely–are the “characteristics of biodiversity certificates” that must be published?
4. cl. 58 - The Bill should be amended to require that, before making a Biodiversity Assessment Instrument, the Minister be satisfied consistency will be achieved.
5. cl.47(1)(a)(ii), cl.48(2)(a)(ii), cl.59(1)(a), cl.61(1)(a) and cl.63(1)(a) - Requiring the Minister ‘have regard to’ advice of the Committee should be strengthened. Equivalent provisions are stronger in relation to ACCUs, see the Independent Review on ACCUs Recommendation 5.
6. cl.102(3) – Why would the Regulator exempt a project proponent from the need to submit reports? This purpose of this provision is not explained and the discretion to allow such exemptions is too broad.
7. cl.160(1) - There is a need for complete transparency in the operation of the Market by enshrining comprehensive disclosure requirements. Requirements need to be in the Bill and span what is to be published in the Register and in reports etc. The EM states “It is also anticipated that reports publicly available via the project register”. Leaving aside the fact the sentence is incomplete, it suggests the intent is to ensure reports are published.
However, nothing in cl.160(1) confirms project reports will be available. It would not be satisfactory if reports are submitted only to the Regulator and not published. This provision must be strengthened.
8. cl. 163(1-2) and cl. 163A(1-2) - The EM states the Register will allow for tracking of project progress and citizen oversight, however, a lack of transparency is being provided for in the Bill and the Bill is not in balance.
Any person can request that project area location and project information is not published, and the Regulator can agree if such disclosure “could reasonably be expected to substantially prejudice” the biodiversity of the project area or a person’s safety.
The EM gives no indication what circumstances are of concern. The discretion available to Regulator is too broad and should be further limited. Otherwise, tracking of project progress and citizen oversight may too often be frustrated.
It is fair enough/understood that the location of sites that are sacred to Aboriginal and Torres Strait Islander people may need to be withheld.
Contrast the fact any person can ask that information not be published with the Bill’s standing provisions. No-one, other than the CEO of the Regulator, has standing to bring legal action for any failure.
Complementary amendments needed: the EPBC Act Amendment Bill
The Bill and NP Plan suggest there will be interaction
between the regimes overseen by the EPA,
‘a body’ and the Regulator. When comment is invited on the Exposure Draft of the EPBC Act Amendment Bill, the following will be important:
9. The EPBC Act should be amended to require the EPA to confirm, when requested by the Regulator (and before the Regulator issues a Biodiversity Certificate), the protected matter(s) that exists in every registered biodiversity project’s project area (if any), and if so what attribute(s) is present for each. Once confirmed by the EPA, these attributes should be recognised as a project area’s ‘protected matter attribute(s)’.
10. To easily distinguish approved projects with a distinct class of offset obligations:
a. The EPBC Act could be amended to enable easy recognition of Approved Actions that, if taken by the Approval Holder, have had or will have residual significant impacts that are serious and irreversible. Each Approved Action in the class would be readily identifiable as an ‘action with a serious and irreversible impact’.
11. The EPBC Act should be amended to require that, where a condition attached to an approval requires an offset, that condition (including through its defined terms) must list and describe, for each protected matter impacted, each attribute that will be lost if the approved action proceeds. Each approval is then associated with a (or a list of) ‘protected matter attribute(s) requiring offset’.
Complementary amendments needed: a Bill to establish “a body” making investments
12. When amendments are brought forward to establish ‘a body’ and its powers, those amendments should:
a. be required to tag every dollar of every ‘conservation payment’ received that acquits an offset obligation, noting the ‘protected matter attribute(s) requiring offset’ to which each dollar relates (tagged dollars), and
b. only expend tagged dollars if that expenditure is associated with and will benefit the (or where there is more than one the full set of) ‘protected matter attribute(s) requiring offset’, and
c. be satisfied that the expenditure of every tagged dollar will benefit a place that:
i. has (or with the enhancement will have) one or more of its associated ‘protected matter attribute(s) requiring offset’, and
ii. is genuinely under threat, and
iii. is protected already, in perpetuity, by an executed secure legal mechanism.
 DCCEEW (2022) Nature Positive Plan: better for the environment, better for business (NP Plan). DCCEEW website. CC BY 4.0, p. 21.
 Standards Reference Group SERA (2021) National Standards for the Practice of Ecological Restoration in Australia. Edn 2.2. Society for Ecological Restoration Australasiahttp://www.seraustralasia.com/standards/NationalStandards2_2.pdf, p. 35
 Commonwealth of
Australia (23 May 2023)
Official Committee Hansard: Senate
Environment and Communications Legislation Committee Estimates,
(Senate Estimates Hansard 23 May 2023), evidence of
Ms Lyn O'Connell PSM, Deputy Secretary, pp. 50-51; PricewaterhouseCoopers (2022) A nature positive Australia: The value of an Australian biodiversity market. PWC website, pp. 13, 15
 Department of the Environment and Water Resources (2007) Use of environmental offsets under the EPBC Act, Trove website, p. 6; Commonwealth of Australia (2012) Environment Protection and Biodiversity Conservation Act 1999 Environmental Offsets Policy (2012 Offsets Policy), DCCEEW website, p. 8
 Comment on the
Environmental Defenders Office,
pp. 8-9; Yung En Chee (16 May 2023).
(a tabulation of organisations’ views on the use of biodiversity certificates to acquit offset obligations).
 DCCEEW (2023) Other effective area-based conservation measures: principles to guide their recognition in Australia, DCCEEW, Canberra CC BY 4.0, p. 15
 Response by FOG (unpublished) to the invitation to comment: Consultation on draft principles to guide recognition of other effective area-based conservation measures in Australia
 COP15 (22 December 2022) Final Text of Kunming-Montreal Global Biodiversity Framework
 Slezak, M. (1 Sep 2022) 'Nature credits' could make Australia the 'Green Wall Street' for the world, Tanya Plibersek says. ABC News website.
 Global Biodiversity Framework (5 March 2023) Monitoring Framework for the Kunming-Montreal Global Biodiversity Framework, GBF website.
 Taskforce on Nature-related Financial Disclosures (2023) Nature-related Risk and Opportunity Management and Disclosure Framework Beta v0.4 – Summary, p. 3
 Hutchens, G (28 Nov 2022) Economics has helped to destroy the environment. Can it be used to save it? ABC News.
 Commonwealth of Australia (Senate Estimates Hansard 23 May 2023) n 9, evidence of Ms Lyn O'Connell PSM, pp. 50-51; PricewaterhouseCoopers (2022) A nature positive Australia: The value of an Australian biodiversity market. PWC website, pp. 13, 15
 NatureFinance, Crowther Lab | ETH Zurich, Environmental Policy Innovation Center, Green Digital Finance Alliance, International Institute for Environment and Development (IIED), Pollination, Pollination Foundation, Regen Network, rePLANET, Terrasos and The Landbanking Group GmbH (27 February 2023) A Joint Response to
 Yung En Chee (21 Feb 2023) Would a nature repair market really work? Evidence suggests it’s highly unlikely. The Conversation website.
 By the time the Regulator is satisfied of progress in any registered biodiversity project, it should be clear to the [EPA if an offset acquittal is planned and the] Regulator what if any protected matter attributes will benefit from enhancement or protection on the project area. That looks like an appropriate time to obtain the EPA confirmation; see the complementary amendment proposed at point 8 below.
 It is understood such investments can be in Biodiversity Certificates to be deposited with the Regulator
 ‘Protected matter attribute(s) requiring offset’ are normally found in conditions of approval attached to approvals granted (in future by the EPA) under the EPBC Act.