By Pat Pepper
NCWQ Environmental Adviser
Update on Great Barrier Reef (GBR): Since my July report, Outlook Report 2014 and strategic assessments for the Great Barrier Reef Region and adjacent coastal zone have been released. Pollutant loads entering the Reef have reduced measurably since the last Outlook report in 2009 due to programmes such as the Reef Water Quality Protection Plan 2013.Traditional owner control of dugong and turtle hunting for traditional purposes has improved through the Traditional Use of Marine Resource Agreements. However, climatechange remains the most serious threat to the GBR with rising sea temperatures likely to increase the risk of mass coral bleaching and gradual ocean acidification to restrict coral growth and survival. These impacts depend on the extent of the exposure to suspended sediments, excess nutrients and pesticides. While improving land management practices are reducing amounts entering the Region, there will be significant time lags before improvements are evident in the Region’s water quality. Until then, chronic impacts, for example on the recovery of seagrass meadows and coral reefs, and outbreaks of the coral eating crown-of-thorns starfish are likely to continue. A series of major storms and floods during the five-year reporting period between Outlook Reports have had an adverse impact on the GBR’s ecosystem. Along the Queensland coast, the northern areas, above Port Douglas, remain in good condition while areas further south have been affected by human use and natural disasters. Great Barrier Reef Marine Park Authority 2014, Great Barrier Reef outlook report 2014: in brief, GBRMPA, Townsville. In addition to concerted international effort to reduce global climate change, the strategic assessment found action was needed at national, state and local levels to build the Reef’s resilience by reducing impacts across all sources. The Reef’s biodiversity and health need to be maintained and in the southern two-thirds of the Region restored by halting and reversing impacts. SA_InBrief_final5.pdf
On the 12th August 2014, the Minister for the Environment, The Hon. Greg Hunt outlined the following initiatives to be adopted by the Commonwealth and Queensland Government from the strategic assessments:
- A cumulative impact assessment policy and guidelines for a transparent, consistent and systematic approach to identifying, measuring and managing collective impacts on the region and its values
- A net benefit policy to guide actions aimed at restoring ecosystem health and improve the condition of values.
- A new approach to decision making based on clear targets for maintaining the reef’s Outstanding Universal Value.
- No port development outside the key long-established ports of Townsville, Abbot Point, Hay Point-Mackay and Gladstone.
- A Reef recovery programme to support local communities and other stakeholders to protect and restore sites of high environmental value and critical ecosystem functions through cooperative regional-scale management approaches.
- Reef-wide integrated monitoring and reporting that underpins the Great Barrier Reef Marine Park Authority’s adaptive management and provides good feedback on the effectiveness of management actions.
SA_InBrief_final5.pdf ; http://www.environment.gov.au/minister/hunt/2014/pubs/mr20140812.pdf;
The Reef 2050 Long-Term Sustainability Plan has targeted identified areas of action from the comprehensive strategic assessment and seeks to address gaps for future management of the Great Barrier Reef World Heritage Area. http://www.environment.gov.au/marine/great-barrier-reef/long-term-sustainability-plan
The Queensland Government has lodged two referrals to the Commonwealth Minister for Environment under the Environmental Protection and Biodiversity Conservation Act 1999 relating to the Abbot Point Port and Wetlands Strategy. Dredge material is likely to be deposited on existing state land to the west of current port facilities, to lay the groundwork for future expansion. Existing man-made wetlands to the south will be enhanced by the creation of a habitat three times the size of the current wetlands. http://www.reeffacts.qld.gov.au/dredging/
In 2012-13, 10,700 large commercial ship movements were reported to have occurred in the region in addition to the operation of 83,000 privately registered recreational vessels and 485 commercial trawlers. Additional measures to the current stringent navigation and pollution prevention controls are proposed in the new North East Shipping Management Planto manage future increases in shipping traffic, ensure the safety of shipping and the prevent ship sourced pollution and other environmental impacts in the Great Barrier Reef, Torres Strait and Coral Sea regions. Theseinclude:
• further areas for consideration of pilotage requirements as traffic levels warrant
• increased resources for port State control inspections and further focus on areas related to navigational risk (such as fatigue, passage planning and navigational equipment)
• additional protections for the Coral Sea afforded by international instruments such as ship reporting and routeing requirements
• using emerging ship tracking technology to provide early alerting of ship breakdowns including a ‘traffic organisation service’ to minimise collision risk
• working with industry to introduce ahead of international timelines the need for ships trading to ports in the region to be equipped with Electronic Chart Display and Information Systems (ECDIS) and bunker oil tanks fitted in protective locations. https://www.amsa.gov.au/forms-and-publications/Publications/AMSA439.pdf
Discovering New Species: Bush Blitz, a species discovery partnership program between the Australian Government, BHP Billiton Sustainable Ecosystems and Earthwatch Australia,
documents the plants and animals in hundreds of properties across Australia’s National Reserve System. Since the program’s inception in 2010, Bush Blitz has discovered about 600 new and undescribed species and gathered baseline scientific data on these and other known species. On a recent expedition to Carnarvon Station Reserve, a Bush Heritage property in central Queensland, scientists from the Queensland Museum, Australian National Herbarium,
University of NSW, Qld Department of Primary Industries, South Australia Museum, and Bush Heritage looked for spiders, ants, bees, flies, plants, reptiles and amphibians. Innumerable species were located including a skink with a bright red throat and Acrocerid flies. The latter have a weird and horrific life history as the larvae live in the body cavity of a spider, feeding on the internal organs of the still-living arachnid possibly for several years before punching out through the spider’s skin and flying off in search of a mate.
Trans Pacific Partnership (TPP): Previously the NCWA Environment and Habitat Adviser, Wendy Rainbird has raised issues about this expected agreement between Australia and USA, Canada, Japan, Mexico, Peru, Chile, Singapore, Brunei, Malaysia, New Zealand and Vietnam. Free trade agreements can free up access to markets for goods and services, and generate investment through removal of perceived barriers to trade such as industry subsidies, tariffs and import quotas. However, the Investor State Dispute Settlement (ISDS) clause is of particular concern as it would allow foreign investors of TPP countries to directly sue the host government in an international tribunal if they perceived regulations and laws to be harmful to their investment, even if those laws and regulations were made to protect the public interest. NCWA TPP trade deals.docx.The Productivity Commission, in a 2010 report on bilateral and regional trade agreements(BRTAs), recommended that the Australian government avoid the inclusion of ISDS provisions in BRTAs that grant foreign investors in Australia substantive or procedural rights greater than those enjoyed by Australian investors http://www.abc.net.au/news/2014-01-09/warne-smith-the-environment-will-pay-for-free-trade/5192156; http://www.pc.gov.au/__data/assets/pdf_file/0010/104203/trade-agreements-report.pdf
Professor Jane Kelsey, an expert on globalisation and economic regulation from the University of Auckland in New Zealand advises that if Australia signs an agreement with these mechanisms in place it will make it harder for the government to put new regulations in place and that the agreement poses a very real risk to the environment.http://www.abc.net.au/environment/articles/2014/10/24/4113298.htm
In the Department of Foreign Affairs and Trade (DFAT) overview on the TTP, it is stated Australia is seeking commitments in areas where trade disciplines can help to address environmental challenges including through liberalising trade in environmental goods and services and disciplines on fisheries subsidies that contribute to over-fishing.https://www.dfat.gov.au/fta/tpp/tpp-overview.pdfHowever Professor Kelsey advises that the leaked Environment chapter in the TPP showed the obligations to be weak and compliance with them unenforceable in contrast to other chapters that subordinate the environment, natural resources and indigenous rights to commercial objectives and business interests. https://wikileaks.org/tppa-environment-chapter.htmlhttp://www.abc.net.au/environment/articles/2014/10/24/4113321.htm
Germany was sued €1.4 billion by energy giant Vattenfall for trying to put in place new water quality standards for a coal-fired power plant. The government avoided the fine by agreeing to weaken its environmental standards http://www.abc.net.au/environment/articles/2014/10/24/4113298.htmThe Hamburg Environmental Authority had issued a licence imposing water quality standards, which, according to Vattenfall, made the whole investment project “unviable”. The corporation argued that the environmental permit violated the provisions set out in Part 3 of the Energy Charter Treaty, an international trade and investment agreement in the energy sector, regarding the promotion and protection of investments. This treaty, like many international investment agreements, grants foreign investors the right to bypass the domestic courts of the host country and to directly file a complaint to an ad hoc international tribunal to challenge proposed government regulations. http://www.tni.org/files/download/vattenfall-icsid-case_oct2013.pdf
Now that Germany has decided to phase out nuclear energy, Vattenfall has filed a request for arbitration against Germany at the International Centre for the Settlement of Investment Disputes (ICSID), housed at the World Bank in Washington. Relying on its rights under the Energy Charter Treaty, Vattenfall is claiming over €3,7 billion in compensation in response to the closure of the nuclear power plants Krümmel and Brunsbüttel.http://www.tni.org/files/download/vattenfall-icsid-case-oct2013.pdf
Wendy Rainbird cited the case of the US company Ethyl that claimed US $251 million in costs for expropriation and discriminatory treatment and inference with its corporate image and reputation. The Canadian government had tried to ban a gasoline additive that was harmful to environment and health but withdrew the ban and paid $13 million. The NSW Government’s regulation that no CSG fracking should occur within two kilometres of urban areas, would be able to be changed by a foreign corporation’s ability to sue the NSW government NCWA TPP trade deals.docx.Ethyl had alleged that a Canadian statute banning imports of the gasoline additive MMT for use in unleaded gasoline breached Canada’s obligations under Chapter Eleven (on investment) of the North American Free Trade Agreement (NAFTA). In response to a similar challenge launched by three Canadian provinces, a Canadian federal-provincial dispute settlement panel, established under the Agreement on Internal Trade, subsequently found against the federal measure. Accordingly, Canada and Ethyl settled all outstanding matters, including the Chapter Eleven claimhttp://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/disp-diff/ethyl.aspx?lang=eng
When the Mexican municipality of Guadalcazar refused to issue a permit to build a waste dump because of the impact on the 800 surrounding residents $16.6 million in compensation was awarded to the dump’s US owners.http://www.abc.net.au/news/2014-01-09/warne-smith-the-environment-will-pay-for-free-trade/5192156. The company contended that Mexico, through the Mexican State of San Luis Potosi and Municipality of Guadalcazar, interfered with and precluded its operation of the landfill, and alleges that this interference was is a violation of the investment provisions of NAFTA and filed its claim with ICSID. A federal permit to construct a hazardous waste landfill had been granted and a state land use permit issued subject to the condition that the project adapt to the specifications and technical requirements indicated by the corresponding authorities, and accompanied by the General Statement that the license did not prejudge the rights or ownership of the applicant and did not authorize works, constructions or the functioning of business or activities. The municipality agreement or support for construction of the landfill was not obtained.https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC542_En&caseId=C155.
Using an ISDS clause, an ICSID tribunal recently forced Ecuador to pay US$1.76 billion (plus interest) to US petroleum company Occidental (Oxy) for a loss of profits after Ecuador cancelled its contract. http://www.abc.net.au/environment/articles/2014/10/24/4113298.htmOxy and Alberta Energy Corporation Ltd (AEC) entered into a Farmout Agreement where AEC acquired a 40% economic interest in Block 15 in return for certain capital contributions. Ecuador terminated the contract as the transfer violated both the Participation Contract and Ecuadorian law, which required ministerial approval. The tribunal held that the termination of the Participation Contract was a disproportionate response to Oxy’s assignment of rights under the Farmout Agreement.The tribunal also held that Ecuador’s measures were “tantamount to expropriation”. International disputes and arbitration lawyers Tai-Heng Cheng and Lucas Bento comment that it is unsurprising that tribunals routinely allocate responsibility between governments and foreign corporations for failed investment projects but observers should now realize that with this authority comes the power to impose damages of over a billion dollars to rectify wrongful acts. http://kluwerarbitrationblog.com/blog/2012/12/19/icsids-largest-award-in-history-an-overview-of-occidental-petroleum-corporation-v-the-republic-of-ecuador/
In the DFAT overview on the TTP, it is stated that Australia is considering the inclusion of Investor-State Dispute Settlement (ISDS) provisions in free trade agreements on a case-by-case basis.https://www.dfat.gov.au/fta/tpp/tpp-overview.pdfMichael Kennedys, Director of Humane Society International, states thatUS has no intention of signing a TPP that does not contain enforceable dispute settlement measures and that Australia will back the US on ISDS proposals. He believes that the immense biological diversity of the Pacific region will be at high risk if the 12 nations sign up to a trade agreement that ignores the environment. http://www.abc.net.au/environment/articles/2014/10/24/4113321.htmWhile Australia has ISDS provisions in place with 28 economies, this would be the first with the US, whose companies are historically the most eager to sue. http://www.abc.net.au/environment/articles/2014/10/24/4113298.htm. Given ultimately tax payers would pay any fines imposed by the ICSID, it would seem prudent for the Australian Government to heed the advice of the Productivity Commission. Also the TPP is an opportunity for Australia to show leadership on the environmental regulation and enforcement front.
Also of concern is that access will be only granted once the agreement is signed by Cabinet and that Parliament does not have the opportunity to debate and vote on the full text but only on the implementing legislation.NCWA TPP trade deals.docx.