Environmental offsets scheme rife with non-compliance

Australia’s environmental offsets system is rife with non-compliance, with some companies routinely failing to meet their obligations to protect nature, a series of federal government audits have found.

The government audited 779 licence conditions across 53 projects last year, including major housing developments, mines, gas fields and road construction, and found 141 cases of non-compliance.

The majority of the projects audited were found to be non-compliant with their environmental offsets obligations in some way, data published by the government shows.

“The harder you look, the more you find,” said a source who asked to remain anonymous because of their knowledge of the audit work.

“When you drill down into it, there is quite widespread non-compliance, and in some cases the issues have been sitting there unnoticed for years.”

All the projects in the audit had signed up for environmental offsets under the federal Environment Protection and Biodiversity Conservation Act – which permits developers to compensate for damaging the natural environment by paying to protect something of equivalent or greater environmental “value” in a different place.

Offsets can be used only if planners decide that the environmental damage can’t be avoided in the first place.

While some of the rule breaches detected in the past year related to relatively trivial mistakes, such as incomplete paperwork, others were more serious.

A mining services company in Queensland, Sojitz Blue, was twice fined for failing to implement its environmental offsets plan, and grasslands it was supposed to be protecting in Queensland’s Central Highlands region were found to be overgrown with invasive weeds.

Four other projects were subjected to “directed variation” by Environment Minister Murray Watt, meaning their licences to operate were altered to meet their environmental obligations.

These included an open-cut coal mine near Singleton in the Hunter Valley, jointly operated by subsidiaries of mining giants Glencore and Peabody, which involved clearing habitat of the endangered birds the Regent Honeyeater and Swift Parrot, and endangered marsupial the spotted-tailed quoll.

The high rate of non-compliance suggests there has been no improvement in the use of environmental offsets since former environment minister Tanya Plibersek called the situation “completely unacceptable” when a series of audits in 2024 found one in seven projects were non-compliant.

A spokesperson for the Department of Climate Change, Energy, the Environment and Water said more resources were now being spent checking environmental offsets, so more breaches were being found.

“As a result of significant capability uplift and increased resourcing, the department is now conducting more audits, using better tools, and applying more rigorous checks than in previous years,” the spokesperson said.

“A more mature approach to compliance activity is enabling the department to resolve issues earlier and more effectively.”

The environmental offsets system is about to be subject to a major overhaul, with draft new standards for offsets sent out to stakeholders for review in December.

The proposed new standards would tighten some criteria for companies seeking to offset environmental damage, but some experts have questioned whether there would be much practical improvement to ecosystems.

“Compliance is important, but it depends what you are complying with,” said Professor Martine Maron of the Biodiversity Council of Australia, an independent group of eminent scientists that called for tighter regulation of environmental offsets in its submission to the review.

“The question we always need to be asking is: ‘What does this mean for our threatened species – are they actually having better outcomes?’

“The fact is that doing really good ecological management and restoration can be very expensive.

“It’s a long-term investment and it takes serious resources. Biodiversity is often seen as something that’s not worth investment. We really do need to value this incredible ecological support system of ours.”

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