Zali Steggall MP speaks on Nature Repair Market Bill

15 June 2023

 I rise to speak on the Nature Repair Market Bill and the related bill. I welcome these bills, which represent a step towards achieving a nature-positive Australia. I also acknowledge the government's professed commitment to protecting 30 per cent of Australia's land and seas by 2030. However, I call on the government to be bolder and to state clearly and definitively that it is committed to achieving a nature-positive Australia at a minimum by 2030. To this end, there are more actions that need to be taken. For example, we must, without delay, stop all native forest logging, and we must protect rain-forests, particularly in incredible areas like the Tarkine in Tasmania. These must be protected. We can't talk about biodiversity loss and conservation and continue to ransack pristine and important ecosystems and environment. It's my hope that this bill is a step towards that and that we're going to do better.

In Warringah, my constituents are passionate about the protection of nature. We celebrate our access to the ocean in the protected Cabbage Tree Bay marine park reserve, the Sydney Harbour trust and the national parks at North Head and Middle Head, as well as the protected areas of Manly Dam and Bantry Bay. We would love to see more of these areas, as well as greater protection of wildlife corridors and investment in the restoration of nature. It's my hope that this bill will assist in the achievement of that and that we can do better in protecting our environment. We need to pull all the levers at our disposal to rebuild nature, and, if private investment is a willing participant, then that is great. I'd also like to thank for their active engagement the many groups concerned about this issue, including the Australian Land Conservation Alliance, the World Wildlife Fund, the Australian Conversation Foundation and many others.

The bill establishes a nationally regulated market for investment in nature. It sounds great, but the question is: who will invest and for what purpose? There is much discussion at present about the value of nature. The Australian Conversation Foundation and the Pollination Group found that roughly half of our economy—or some $900 billion in Australia's economy—directly depends on nature. So this is not a nice-to have; this is a must-have. Also, 50 per cent of global GDP depends on nature. We're talking about food and water. All these aspects are directly linked to nature. Despite this, there hasn't been significant investment in its protection, let alone its repair and conservation. There's this idea often that these things are separate and that somehow it's a nice-to-have, when it's intrinsically linked to so much of our way of life. In briefings about this bill, the government has made many speeches in this place about the predicted $137 billion in investment that this market could drive into nature, as modeled by the PwC report. Many also dispute this advice. It's important to put into perspective that even that report by PwC argued that a regulated market is just one pillar of the four needed to drive investment in nature. The other pillars that are urgently needed include: a national biodiversity strategy and plan; the establishment of national standards and foundational science; a regulatory framework; and compliance and enforcement measures—and, I would argue, government investment to kickstart this market.

These points are supported throughout the submissions to the Senate inquiry, with the key concerns surrounding the integrity of the market and the lack of driver for investment without all the other pillars lining up. Again, this looks good in practice and on paper, but, for it to work, it's going to need a much more significant and serious commitment. The Australian Sustainable Finance Institute in its submission stated:

… the development of a nature market framework will not be sufficient to redirect financial flows towards nature positive outcomes.

I've called on the government and discussed this with the minister, and I call on the Prime Minister to show leadership. There needs to be public funding to incentivise, to kickstart, this market. Just as we saw with renewable energy, where the CFC and ARENA took care of some of the initial market risk so that the private sector could follow, the same needs to happen for this market to work and be successful.

The first pillar is a national biodiversity strategy and plan. Australia is a party to the Convention on Biological Diversity. It has had an overarching strategy for biodiversity since 1996. The latest iteration is Australia's Strategy for Nature 2019-2030. However, the Samuel review, released in 2020, showed our current national environmental protection laws are not working. The 2019 Samuels review of the EPBC Act criticised the act. It said:

The Act is complex and cumbersome and it results in duplication with State and Territory development approval processes. This adds costs to business, often with little benefit to the environment.

The reform of the Environmental Protection and Biodiversity Conversation Act is urgent. We need to see those enhanced protections in place now. That was in 2020. The last government failed to meaningfully implement those recommendations, and, to date, this government has also failed to implement those recommendations. When in opposition, the current government called for urgent action and implementation of the recommendations. Now, in government, we see further delay.

Many are now saying that, despite the government's commitment to implement the reforms by the end of the year, the time line is slipping and next year is now more likely. This is all vital for this bill to have meaning. If we want this to work, the EPBC Act amendments are needed and the Samuel review recommendations need to be implemented. Without these reforms there's no true transparency about how this nature market will operate. The reform of the EPBC Act will determine whether the credit generated from this scheme can be used as offsets and, therefore, whether they will enhance nature or merely maintain the status quo at best. I believe offsets can be a useful tool, but the net result must be nature positive. Business as usual is not working and is not acceptable. I welcome the minister's assurance that it is in the intent, but I won't be convinced of this until we see the EPBC Act amendment legislation.

The second pillar is standards and foundational science. National environmental standards are and must be part of the EPBC Act reform. They were central to the Samuel review recommendations. In addition, both government and industry need timely data and analytics to provide them with a robust baseline. I welcome the funding in the federal budget for the establishment of Environment Information Australia to enhance that data collection and improve the transparency of the performance of our natural environment protection. This new body will be essential in monitoring the performance and success of the nature market.

Specifically, within this bill, there are concerns about the permanency of the credits. The bill allows for a creation of credits for anywhere from 25 to 100 years, or less than 25 years as agreed by the regulator. What is the value of a biodiversity credit of less than 25 years is a very relevant question. The government's response to this has been that it will be a market driven price. However, when this is combined with broader concerns about integrity, I don't support the inclusion of this level of flexibility. The 'less than 25 years as agreed by the regulator' is problematic and undermines the integrity of the scheme.

My third point is on a regulatory framework. Arguably, this bill will help to achieve some regulatory control through the establishment and role of the market regulator. However, there are questions about whether the Clean Energy Regulator is the right body to oversee this market. There are clear conflicts in certain cases. The Clean Energy Regulator acknowledges in its submission:

While the CER has sophisticated tools and a strong regulatory framework, there may be some gaps in our current skills and toolset to monitor compliance for some NRM methods.

While there are clear benefits in having the same body oversee the carbon market and the nature market, we need to make sure that the Clean Energy Regulator is resourced to effectively fulfil both roles, or else we will see further questions of the integrity of the markets, such as we're still dealing with in the carbon market space. My proposed amendments in relation to this bill and the amendments of other crossbench members are seeking to implement some of the recommendations of the recently completed Chubb review to ensure better trust and integrity in the market system—the carbon market into the nature market.

My fourth point is on the compliance and enforcement aspect. Clearly, in addition to the overhaul of the EPBC Act, there must be an authority set up to police and enforce obligations under the relevant legislation—in particular, the overhauled EPBC Act. The establishment of Environment Protection Australia will be essential as an independent cop on the beat to enforce standards and compliance. Without this, the government strategy, however well intended it might otherwise be, will fail. Tradeable certificates such as those envisaged by the Nature Repair Market Bill may serve well as a carrot, but the hard reality is that there also must be a stick.

On government investment, I and many groups who are active in this space strongly feel that the government investment in this market is key and absolutely essential to the achievement of the desired nature-positive outcome. The government has a responsibility to kickstart investment and help mitigate risk. In order for this market to be successful, we need co-investment from government. We need a Clean Energy Finance Corporation equivalent—a nature finance corporation, I would suggest—that the government and the Treasurer should be putting some significant funds behind. We can't achieve the objectives without it. The government argues that the Natural Heritage Trust can fulfil that role, but I don't believe they have sufficient mandate or resources to adequately fulfil that role at present.

The Bob Brown Foundation put it well in their submission:

The purchase of submarines under the AUKUS deal is direct Government investment of $368billion. It is not tradeable certificates or offsets; it is straight up Government spending because 'prevention is better than cure' on national security …

I absolutely agree. But prevention is better than cure when it comes to conservation as well, especially if 50 per cent of our GDP is tied up in nature. And so it is incredibly important that we address that. I fear that, however well intentioned this bill is, it doesn't go far enough to enable that target to be achieved, and the government has missed an opportunity today. Repairing nature is a key part of making sure that we have a sustainable future and of having any chance of negating the worst effects of climate change. We know there are so many impacts already locked in, so restoring and regenerating the degraded natural environment is a critical part of ensuring the planet's survival and that of our way of life and our ecosystems. We can bring back to life dying ecosystems, and delicate natural balances can be recognised and restored.

In other words, participating in a market which puts a value on strategies to achieve nature positive must not be just convenient and a new way of offsetting other shortfalls in corporate behaviour; it's a critical end in itself. These tradeable certificates need to be additional to other measures taken by individuals and corporate entities and should not be just used as offsets. There are many groups that have raised concerns in relation to that, so it's really important that the government grapples with these concerns so that this can have some integrity.

Of course, there must be a balancing of priorities. For example, the National Farmers Federation made a submission:

… that this legislation must first and foremost address the needs of the farm sector, others can follow.

Again, that is an interest at work. WWF indicated:

The use of nature repair certificates to meet mandatory biodiversity offset obligations should be ruled out or at least deferred until the Nature Repair Market is established …

The Property Council of Australia submitted:

Our members have further reported there will be a significant appetite for purchasing biodiversity certificates, and engaging in projects, if the NRM functions effectively and delivers high-integrity environmental outcomes.

We can see from all of this that there are some concerns.

Empowerment of rural and remote Indigenous communities is incredibly important, and I have provided amendments to that effect to ensure that remote and regional communities, and in particular Indigenous communities, are at the centre of this land conservation.

Finally, I'd like to thank the many organisations and volunteers who dedicate so much time, so many hours to cleaning up and protecting our local environment. There are some incredible initiatives. We know Australians care about their environment. To date, politics and regulations haven't properly reflected that. But we are now at a time where it is a priority and so many, especially our young people, are calling on this place to do more to protect our environment.