This document provides an overview of biodiversity offsetting approaches in Australia. It examines the theory and practice of offsets, including the goals of minimizing costs and optimizing outcomes. Case studies are presented on the EPBC offsets calculator and NSW's Framework for Biodiversity Assessment. Key points covered include the various jurisdictional approaches, principles of offsets, tools like calculators and databases, and strategies for maximizing outcomes and minimizing costs through actions like early planning and effective offset site management.

1. OFFSETS IN THEORY & PRACTICE
IMPROVING OUTCOMES &
MINIMISING COSTS
Travis Peake
22 July 2015

2. 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

3. 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
Offsets in Theory
and Practice

4. BIODIVERSITY OFFSETTING
AROUND AUSTRALIA

5. 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
Offsets in Theory
and Practice

6. 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
Offsets in Theory
and Practice

7. 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
Offsets in Theory
and Practice

8. 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
Offsets in Theory
and Practice

9. 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
Offsets in Theory
and Practice

10. 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
Offsets in Theory
and Practice

11. 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
Offsets in Theory
and Practice

12. 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
Offsets in Theory
and Practice

13. 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
Offsets in Theory
and Practice

14. 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
Offsets in Theory
and Practice

15. 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
Offsets in Theory
and Practice

16. 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
Offsets in Theory
and Practice

17. CASE STUDY 1 – EPBC
ENVIRONMENTAL OFFSETS
CALCULATOR

18. 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)
Offsets in Theory
and Practice

19. EPBC Offset Assessment Hierarchy
Offsets in Theory
and Practice

20. 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
Offsets in Theory
and Practice

21. 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
Offsets in Theory
and Practice

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

23. 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
Offsets in Theory
and Practice

24. 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)
Offsets in Theory
and Practice

25. 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.
Offsets in Theory
and Practice

26. 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.
Offsets in Theory
and Practice

27. 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
Offsets in Theory
and Practice

28. TG Scores and Offset Ratios
• Offset ratios can be calculated for all possible TG scores
Offsets in Theory
and Practice
0
2
4
6
8
10
12
14
16
0.1
0.125
0.25
0.3
0.325
0.35
0.375
0.4
0.425
0.45
0.475
0.5
0.525
0.55
0.575
0.6
0.625
0.65
0.675
0.7
0.725
0.75
0.775
0.8
0.825
0.85
0.875
0.9
0.925
1
OffsetRatio
TG Score

29. 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
Offsets in Theory
and Practice

30. 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
Offsets in Theory
and Practice

31. MAXIMISING OUTCOMES

32. 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
Offsets in Theory
and Practice

33. 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
Offsets in Theory
and Practice

34. 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
Offsets in Theory
and Practice

35. 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
Offsets in Theory
and Practice

36. 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
Offsets in Theory
and Practice

37. MINIMISING COSTS

38. 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
Offsets in Theory
and Practice

39. 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
Offsets in Theory
and Practice

40. KEY INGREDIENTS REQUIRED
FOR SUCCESS

41. 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

42. 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.
Offsets in Theory
and Practice

43. Offsets in Theory and
Practice
Thankyou
Acknowledgement:
Nick Thomas, Clayton Utz, for
some nationwide offsets
material
Travis Peake
Practice Leader Ecology
Umwelt (Australia) Pty Limited
0408 115 679
tpeake@umwelt.com.au