Program: Pilbara Environmental Offsets Fund

The Pilbara region has ancient and striking landscapes and many diverse habitats, including mangroves, grassland savannahs, mountain ranges, gorges, wetlands and tropical woodlands.

The region has very high biodiversity value, possessing high species richness and many endemic flora and fauna species. It has 150 conservation-significant flora species and the greatest reptile diversity in Western Australia. It is also an international hotspot for subterranean fauna.

The Pilbara is also one of Australia’s most important regions for mineral wealth, and generates 40 per cent of Western Australia’s gross domestic product. While industry is vital to our economic progress, its impacts need to be balanced with the conservation of the region’s precious environmental values.

Environmental offsets have helped mining companies and other proponents meet their obligations under state and federal legislation in the Pilbara for many years.

They enable sustainable mining development by counterbalancing impacts that can’t be avoided or mitigated. Offset activities are undertaken outside a specific project area rather than onsite.

To date, the effective implementation of offsets in the Pilbara has been hampered by the region’s unique land tenure (all crown land with overlapping mining, native title and pastoral interests). This makes traditional land acquisition and access for on-ground offset activities difficult. Offsets have not always been connected with other conservation efforts or deployed where needed most.

In 2012, the Western Australian Minister for Environment mandated that proponents in the Pilbara pay their environmental offsets into a strategic fund for conservation. In the same year, the federal Minister for Environment gave proponents the option of doing so. This led to the establishment of the Pilbara Environmental Offsets Fund.

The approach was supported by strategic advice from the Environmental Protection Authority (EPA) to the state Minister for Environment in 2014, which identified key threats and challenges to the conservation of biodiversity in the region: EPA’s 16(E) Cumulative environmental impacts of development in the Pilbara region advice.

Delivering the fund

The Pilbara Environmental Offset Fund enables government, in partnership with Traditional Owners and regional stakeholders, to broker access for offsets on land with complicated tenure arrangements, and in doing so deliver projects that:

• are co-designed
• are strategic, linked and delivered across the landscape
• leverage other regional programs and build on existing partnerships between Traditional Owners, conservation agencies, industry and government, and engage Traditional Owners and rangers in work on their Country.

The fund’s implementation plan describes how the fund will be delivered over the next five years.

The fund's engagement and co-design plan sets out the fund's collaborative approach to identifying, developing and implementing projects.

The Department of Water and Environmental Regulation is responsible for managing $90 million worth of offset contributions over the next 40 years. This will ensure that offset payments directly benefit vegetation and habitat impacted by mining.

Each of the government, mining and community sectors expect good governance and all have helped develop the fund’s governance framework.

Traditional owners, industry, government, natural resource management organisations, conservation groups and the research sector have advised government on the development and evaluation of the five-year implementation plan, which defines the priorities and criteria for project selection.

The fund is managed in accordance with the governance framework and terms of reference for the implementation advisory group (IAG) and the project recommendation group (PRG). Implementation advisory group meeting summaries are available in the document collection.

The governance framework and terms of reference establish transparent decision-making processes, clarify roles and responsibilities, and guide the delivery of projects with the monies receipted to the fund.

Core principles

The Minister for Environment has endorsed five core principles which frame delivery of the fund, which are:

1. Transparent and accountable fund administration
2. Cost-efficiency, including maximising leveraging opportunities to achieve regional environmental outcomes and minimising administration
3. Effective performance evaluation and continual improvement
4. Clear roles, responsibilities and accountabilities
5. Constructive and transparent engagement with key stakeholders.

Roles and responsibilities

Minister for Environment

The Minister is the fund’s key decision-maker. He or she decides which projects get funded based on the criteria set in the plan.

Departmental management

The Department of Water and Environmental Regulation (the department) manages the fund given its role in assuring compliance with the Financial Management Act 1997, Part IV of the EP Act (Ministerial Conditions), the WA Offsets Policy and conditions of the special purpose account. The department also chairs and provides the secretariat for the IAG and PRG.

The department and the Department of Biodiversity, Conservation and Attractions (DBCA) jointly advise the Minister, including putting forward the recommendations of the IAG and PRG.

Implementation advisory group (IAG)

The IAG is a group of experts associated with rehabilitation and conservation projects in the Pilbara, representing:

• the mining industry
• state government agencies
• non-government land management and conservation organisations
• traditional owners
• Western Australian Biodiversity Science Institute.

The IAG provides advice to the Directors General of this department and DCBA, and the Minister for Environment on:

• strategies, plans, reports and projects that exist to conserve biodiversity in the Pilbara
• leveraging opportunities
• the five-year implementation plan
• the scope of each project round
• the fund’s monitoring, evaluation, reporting and improvement framework.

The IAG meets quarterly, although a special meeting may be convened by the Chair at any time. The IAG meeting summaries are available in the document collection.

IAG membership

IAG members include:

Invitees:

• Commonwealth Department of Agriculture Water and Environment
• Pilbara Cultural Land Management Project

Project recommendation group (PRG)

The PRG consists of representatives from this department, DBCA and the federal Department of the Environment and Energy (DoEE), all of whom have experience in the deployment of biodiversity conservation projects.

An independent probity officer attends PRG meetings to ensure that project recommendation decisions are made in accordance with the implementation plan.

The PRG reviews project applications and recommends to the Minister which projects should be invested in.

Delivery agents

Delivery Agents will deliver projects selected by the Minister.

They may be drawn from the not-for-profit, government or private sectors through partnerships, direct requests or a call for expressions of interest.

Delivering the fund

Project implementation principles

State and federal offset policies define principles to guide the implementation of environmental offsets.

Offsets Framework

Offsets Register

Key offset policy principles for implementation of the fund are:

Priority areas for investment

The fund will target investment in areas with a high density of both state and federal environmental matters, and where land tenure provides an opportunity for legal access and longevity for offset outcomes.

Projects will be delivered at different scales:

• Landscape-scale programs address threats like weeds, feral animals, and inappropriate fire across the landscape.
• Priority area programs build on the landscape-scale outcomes to further improve and protect vegetation and species habitat in identified priority areas.
• Site-specific projects protect and improve specific environmental matters such as Priority Ecological Communities or a particular habitat with unique attributes.

Three priority areas for the first five years have been identified and are the starting point for the fund. Priority areas include:

• Area 1: Chichester sub-bioregion – area south of Port Hedland centred on the Great Northern Highway
• Area 2: Hamersley sub-region – area to the far east of the sub-region abutting the North West Coastal Highway
• Area 3: Fortescue sub-bioregion – the mid Fortescue Valley.

The priority areas included in each project round will depend on the money available in the fund, and where projects that achieve long term outcomes for offset, are most feasible.

Under the EP Act, the EPA undertakes the environmental impact assessment (EIA) process for significant development projects proposed for Western Australia.

Under the EIA process, companies undertaking mining and infrastructure projects in the Pilbara bioregion may be required to pay a rate per hectare of impact that they cannot avoid or rehabilitate. This money is then combined into the Pilbara Environmental Offset Fund’s special purpose account.

The conditions for implementing these offsets are set out in Ministerial Approval Statements which are published on the EPA website.

Rates paid for the offset

Implementation conditions in Ministerial Statements set out the rate per hectare that proponents must pay. Rates have been set in the four sub-regions in the Pilbara bioregion: Chichester, Fortescue, Hamersley and Roebourne.

These rates are based on the level of biodiversity protection in the region, and cumulative impacts to environmental values, including high quality vegetation and the conservation of significant-species habitat.

A base rate applies for impacts to native vegetation in good to excellent condition, which may include impacts to fauna habitat.

A higher rate may apply for impacts to some types of specialised environmental values, including but not limited to impacts on:

• riparian vegetation
• Threatened or Priority Ecological Communities
• important vegetation types
• specialised fauna habitat.

A negotiated rate, or alternative approach, will be determined on a case-by-case basis for impacts to particularly significant or sensitive environmental values that do not suit a standardised value.

The rate per hectare will be subject to annual indexation to the Perth – All Groups Consumer Price Index.

Table 1 Rates per hectare for each IBRA Pilbara sub-region (rounded to a whole number)

Australian Government conditions

A memorandum of understanding (MoU) has been established between the state and federal governments to enable the fund to receive money required as a condition under Part 9 or 10 of the EPBC Act (Cth). The agreement means that the Pilbara Environmental Offset Fund will now collect and deploy the environmental offset monies paid by industry under both State and Commonwealth environmental legislation.

The addition of Commonwealth offset funds into the account will allow for larger and more strategic conservation programs and will provide a more streamlined ‘one stop’ compliance process for proponents with offset obligations under both State and Commonwealth regulation.

The MoU commits the state and commonwealth to work together to deliver strategic and secure EPBC Act offsets in the Pilbara, and to monitor and evaluate outcomes for Matters of National Environmental Significance. The MoU also commits to a review of offset rates to ensure they reflect the actual cost of planning, administering, monitoring, and reporting on the delivery of offsets in the Pilbara.

The EPBC Act Environmental Offsets Policy guides the use of offsets under federal legislation.

This information is available on the projects delivered through the Pilbara Environmental Offsets Fund webpage.

The independent evaluation of the Pilbara Environmental Offsets Fund provides clarity on how to deliver the program more efficiently and effectively. Extensive stakeholder engagement has clearly shown that the fund is supported by many, and all involved want to see the program succeed. 

The State Government is committed to PEOF’s future success and will approach program modifications through the lens of the evaluation.

Read the evaluation report and State Government response.