FEDERAL COURT OF AUSTRALIA

VicForests v Friends of Leadbeater’s Possum Inc [2021] FCAFC 66

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    Orders 1-19 and 21-22 of the orders made on 21 August 2020 be set aside.

3.    In lieu thereof order that the proceeding be dismissed.

4.    The respondent is to file and serve a proposed order for costs in respect of the hearing below (excluding the separate question hearing) and the appeal, and submissions in support not exceeding 3 pages within 7 days of the date of these orders.

5.    The appellant is to file and serve a proposed order for costs in respect of the hearing below (excluding the separate question hearing) and the appeal, and submissions in support not exceeding 3 pages within a further 7 days thereafter.

6.    The respondent is to file and serve any submissions in reply relating to costs within a further 3 days thereafter.

7.    Costs be determined on the papers.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:    

INTRODUCTION

1    Friends of Leadbeater’s Possum Inc (FLP) is an environmental group, which commenced proceedings against VicForests, a Victorian statutory agency whose purpose is the management and sale of timber resources in Victorian State forests on a commercial basis.

2    The proceedings concern forestry operations in 66 specified native forest coupes (an area or patch of forest in which logging occurs) in the Central Highlands region of Victoria and the effect of those forestry operations on two native fauna species, the Greater Glider (Petauroides Volans) and the Leadbeater’s Possum (Gymnobelideus leadbeateri). Both are listed as threatened species under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act): the Leadbeater’s Possum in the critically endangered category and the Greater Glider in the vulnerable category.

3    The forest in question is included within the region covered by the Central Highlands Regional Forest Agreement, being an agreement entered into between Victoria and the Commonwealth in 1998, and subsequently varied on 26 March 2018. It was varied again, subsequent to the trial of these proceedings, on 30 March 2020, with an extension until 30 June 2030. The relevant version, for the purposes of the proceedings, is that as amended by the 2018 variation (CH RFA).

4    There were two essential issues in the case that proceeded to trial:

(a)    the first was whether VicForests, in the conduct of its forestry operations in the Central Highlands, had breached, or was likely to breach, clauses of the Code of Practice for Timber Production 2014 (the Code) and thereby lost the benefit of the exemption under s 38(1) of the EPBC Act; and

(b)    if VicForests had lost the benefit of that exemption, whether VicForests’ past and proposed forestry operations were actions that had, or were likely to have, a significant impact on the Leadbeater’s Possum and the Greater Glider, contrary to ss 18(2) and 18(4) of the EPBC Act respectively.

5    In reasons delivered on 27 May 2020, Friends of Leadbeater’s Possum Inc v VicForests (No 4) [2020] FCA 704; (2020) 244 LGERA 92 (Principal reasons), the primary judge held that FLP had established its pleaded case and made findings, inter alia, that:

(a)    VicForests did not, and is not likely to, apply the precautionary principle to the conservation of the Greater Glider in certain coupes; accordingly, in relation to the forestry operations undertaken by VicForests in those coupes, its conduct was not covered by the exemption in s 38(1) of the EPBC Act (Principal reasons at [6(b) and (d)]);

(b)    miscellaneous breaches of the Code result in the loss of exemption under s 38(1) of the EPBC Act in respect of forestry operations in the coupes where the breaches occurred (Principal reasons at [6(c)]);

(c)    none of the 66 impugned coupes are subject to the s 38(1) exemption (Principal reasons at [6(e)]);

(d)    the findings in 6(b)-(d) of the Principal reasons do not result in only a qualified loss of the s 38(1) exemption restricted to the impact of the forestry operations on the Greater Glider (Principal reasons at [6(f)]);

(e)    for the purposes of s 18 of the EPBC Act, each forestry operation in each of the 66 impugned coupes, each series of forestry operations in each coupe group, the forestry operations undertaken in the Logged Coupes (collectively) (as defined in the Principal reasons), the forestry operations proposed to be undertaken in the Scheduled Coupes (as defined in the Principal reasons), and the forestry operations in all of the 66 coupes (collectively), constitute an action (Principal reasons at [6(g)]); and

(f)    in relation to the actions so identified, VicForests’ conduct of forestry operations is likely to have had, or is likely to have, a significant impact on the Greater Glider and/or the Leadbeater’s Possum such as to contravene, or engage, s 18 of the EPBC Act (Principal reasons at [6(h)]).

6    These findings were made after a 12 day hearing, involving voluminous documentary evidence, in addition to the oral evidence of seven witnesses and a view of some of the relevant forest regions in the Central Highlands. A third further amended statement of claim and amended originating application were filed on the first Monday of the trial, their contents having been foreshadowed only late in the afternoon of the previous Friday (Principal reasons at [20]). The Principal reasons extend to some 1464 paragraphs and involve a detailed and careful analysis by the primary judge of the evidence and the submissions, the last of which were filed some three months after the last day of the hearing.

7    As the primary judge observed in the Principal reasons, the proceedings had already been the subject of two published decisions, one of which established the framework for the issues to be determined in the Principal reasons, Friends of Leadbeater’s Possum Inc v VicForests [2018] FCA 178; (2018) 260 FCR 1 (Separate Question reasons), and one granting interlocutory injunctions until the hearing and determination of the proceeding, Friends of Leadbeater’s Possum Inc v VicForests (No 3) [2018] FCA 652; (2018) 231 LGERA 75 (Injunction reasons).

8    This is an appeal from the substantive orders made by the primary judge in Friends of Leadbeater’s Possum Inc v VicForests (No 6) [2020] FCA 1199 which was delivered on 21 August 2020. Orders 1 to 19, which were amended on 21 April 2021 (Final orders reasons), are as follows:

Declarations

Declarations that forestry operations not covered by exemption

1.    In undertaking a forestry operation in each of the Logged Glider Coupes, including the planning and preparatory phases for that forestry operation, VicForests did not comply with cl 2.2.2.2 of the Code, and accordingly, the exemption in s 38(1) of the Act did not apply to those forestry operations.

2.    VicForests is likely to undertake a forestry operation in each of the Scheduled Coupes, including the planning and preparatory phases for that forestry operation, in a manner that will not comply with cl 2.2.2.2 of the Code, and accordingly, the exemption in s 38(1) of the Act will not apply to those forestry operations.

3.    In undertaking a forestry operation in coupe 462-504-0004 (Skerry’s Reach), including the planning and preparatory phases for that forestry operation, VicForests did not comply with cl 4.3.1.1 and Appendix 3 Table 14 of the Management Standards in respect of mature Tree Geebung, and accordingly, the exemption in s 38(1) of the Act did not apply to those forestry operations.

4.    In undertaking a forestry operation in coupe 348-506-0003 (Blue Vein), including the planning and preparatory phases for that forestry operation, VicForests did not comply with cl 2.2.2.4 of the Code, cl 2.1.1.3, cl 4.2.1.1 and Table 13 of the Management Standards and Table 4 of the Planning Standards, in respect of Leadbeater’s Possum Zone 1A habitat, and accordingly, the exemption in s 38(1) of the Act did not apply to those forestry operations.

5.    In undertaking a forestry operation in coupe 345-505-0006 (Hairy Hyde), including the planning and preparatory phases for that forestry operation, VicForests did not comply with cl 2.2.2.4 of the Code, cl 2.1.1.3, cl 4.2.1.1 and Table 13 of the Management Standards and Table 4 of the Planning Standards, in respect of a Leadbeater’s Possum colony, and accordingly, the exemption in s 38(1) of the Act did not apply to those forestry operations.

6.    In undertaking forestry operations in coupes 309-507-0001 (Mont Blanc), 309-507-0003 (Kenya), 307-507-0004 (The Eiger), 344-509-0009 (Ginger Cat), 290-527-0004 (Camberwell Junction), 307-505-0011 (Guitar Solo), 462-507-0008 (Estate), 298-516-0001 (Glenview), 298-519-0003 (Flicka), 348-515-0004 (Greendale), 462-504-0004 (Skerry’s Reach), 463-504-0009 (De Valera), 345-503-0005 (Bullseye), 345-506-0004 (Opposite Fitzies), 317-508-0008 (Professor Xavier), including the planning and preparatory phases for those forestry operations, VicForests did not comply with cl 2.5.1.1 of the Code and cl 5.3.1.5 of the Management Standards, in respect of screening timber harvesting operations from view, and accordingly, the exemption in s 38(1) of the Act did not apply to those forestry operations.

7.    In undertaking forestry operations in coupes 344-509-0009 (Ginger Cat), 348-515-0004 (Greendale), 288-516-0007 (Golden Snitch), 288-516-0006 (Hogsmeade), 287-511-0006 (Houston), 287-511-0009 (Rocketman), 463-504-0009 (De Valera), 317-508-0008 (Professor Xavier), including the planning and preparatory phases for those forestry operations, VicForests did not comply with cl 2.2.2.1 of the Code and cl 4.1.4.4 of the Management Standards, in respect of gaps between retained vegetation, and accordingly, the exemption in s 38(1) of the Act did not apply to those forestry operations.

Declarations that VicForests contravened s 18 in each of the coupes

8.    In undertaking a forestry operation in each of the Logged Coupes, including the planning and preparatory phases for that forestry operation, VicForests took an action that is likely to have had a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(a) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(a) of the Act.

9.    In proposing to undertake a forestry operation, including the planning and preparatory phases for that forestry operation, in each of the Scheduled Coupes, VicForests is proposing to take an action that is likely to have a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(b) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(b) of the Act.

Declarations that VicForests contravened s 18 in each of the Coupe Groups

10.    In undertaking the series of forestry operations in each of the Cambarville, Matlock, Rubicon Coupe Groups, including the planning and preparatory phases for those forestry operations, VicForests took an action that is likely to have had a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(a) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(a) of the Act.

11.    In proposing to undertake the series of forestry operations in each of the Beech Creek, Mount Bride, Nolan’s Gully, Snobbs Creek, South Noojee, Sylvia Creek, Torbreck River Coupe Groups, including the planning and preparatory phases for those forestry operations, VicForests is proposing to take an action that is likely to have a significant impact on:

a.     Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(a) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(a) of the Act.

12.    In undertaking the series of forestry operations in the Acheron, Ada River, Ada Tree, Baw Baw, Big River, Hermitage Creek, Loch, Mount Despair, New Turkey Spur, Noojee, Starlings Gap Coupe Groups, including the planning and preparatory phases for those forestry operations, VicForests has been taking and proposes to continue taking an action that is likely to have had, and is likely to have, a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(a) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(a) of the Act.

Declarations that VicForests contravened s 18 in the Logged Coupes as a whole

13.    In undertaking forestry operations in all of the Logged Coupes, including the planning and preparatory phases for those forestry operations, VicForests has taken an action that is likely to have had a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(a) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(a) of the Act.

Declarations that VicForests contravened s 18 in the Scheduled Coupes as a whole

14.    In proposing to undertake forestry operations in all of the Scheduled Coupes, including the planning and preparatory phases for those forestry operations, VicForests is proposing to take an action that is likely to have a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, which would constitute a contravention of s 18(4)(b) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, which would constitute a contravention of s 18(2)(b) of the Act.

Declaration that VicForests contravened s 18 in the Logged and Scheduled Coupes as a whole

15.    In undertaking the series of forestry operations in the 66 impugned coupes, including the planning and preparatory phases for those forestry operations, VicForests has been taking and proposes to continue taking an action that is likely to have had, and is likely to have, a significant impact on:

a.    the Greater Glider, a listed threatened species included in the vulnerable category, contravening s 18(4)(b) of the Act; and/or

b.    the Leadbeater’s Possum, a listed threatened species included in the critically endangered category, contravening s 18(2)(b) of the Act.

Injunctions

16.    Subject to order 17 below, and on the basis of orders 9, 11, 12, 14 and 15, pursuant to s 475(2) of the Act, VicForests whether by itself, its agents, its contractors or howsoever otherwise is restrained from conducting forestry operations in the Scheduled Coupes.

17.    Nothing in order 16 above prevents VicForests from planning forestry operations in the Scheduled Coupes for the purpose of participating in any process under the Act which provides for Pt 3 of the Act being rendered inapplicable to forestry operations in the Scheduled Coupes.

18.    Subject to order 19 below, and on the basis of orders 8, 10, 12, 13 and 15, pursuant to s 475(2) of the Act, VicForests whether by itself, its agents, its contractors or howsoever otherwise is restrained from conducting any further forestry operations in the Logged Coupes.

19.    Nothing in order 18 above prevents VicForests from conducting regeneration activities other than burning for the purpose of compliance with Pt 2.6.1 of the Code within only that part of each of the Logged Coupes that is in fact already harvested.

9    These reasons adopt the same defined terms as those used in the primary judge’s Principal reasons and Final orders reasons.

10    VicForests also appeals the order that it pay the respondent’s costs of the proceeding, fixed by way of lump sum and an order that, absent agreement, the question of an appropriate lump sum be referred to a Registrar for determination.

11    For the reasons that follow, the appeal must be allowed on the basis that, on the proper construction of s 38(1) of the EPBC Act, the forestry operations conducted by VicForests were undertaken in accordance with the contents of the CH RFA and were therefore exempt from the operation of Pt 3 of the EPBC Act.

THE PROCEEDINGS IN CONTEXT

12    The Greater Glider was listed in the vulnerable category under the EPBC Act effective 5 May 2016 and on the Threatened List under the Flora and Fauna Guarantee Act 1988 (Vic) effective 14 June 2017 (Principal reasons at [30]). It is the largest gliding possum in Australia and its longevity is estimated at 15 years. Its generation length is likely to be 7-8 years (Principal reasons at [31]). It is a nocturnal marsupial and, in the region covered by the CH RFA, its habitat is the Mixed Species and Ash forests which serve both as a source of food and of denning and resting (Principal reasons at [32]). During the day, it shelters in tree hollows, with a particular selection for large hollows in large old trees (Principal reasons at [34]).

13    The Greater Glider was assessed as meeting the criteria for listing in the vulnerable category as a threatened species on the basis of its “Population size reduction (reduction in total numbers)” (Principal reasons at [44]). The primary judge set out (Principal reasons at [51]) the Conservation Advice, issued by the Threatened Species Scientific Committee, established pursuant to s 502 of the EPBC Act, which stated that:

    despite the absence of robust estimates of total population size or population trends across the species’ total distribution, declines in numbers, occupancy rates and extent of habitat have been recorded at many sites, from which a total rate of decline can be inferred;

    the most comprehensive monitoring program for Greater Gliders is in the Central Highlands, having been monitored annually since 1997, and over the period from 1997 to 2010, the average population decline is an average of 8.8% per year;

    if that rate is extrapolated over the 22 year period relevant to this assessment, the rate of decline is 87%; and

    higher rates of decline were recorded in forests subject to logging than in conservation reserves; declines are also associated with major bushfires and lower than average rainfall.

14    The Leadbeater’s Possum is a small, nocturnal, arboreal possum which lives in colonies of between two to twelve individuals, including one breeding pair. It shelters in hollow trees during the day and occupies territories that contain multiple den sites. The adult Leadbeater’s Possum lives for approximately 10 years and the first breeding age is typically two years. The Leadbeater’s Possum reproduces twice a year and has more than one young. Generational length for Leadbeater’s Possum is six years (Principal reasons at [82], [85]-[87]).

15    The Leadbeater’s Possum habitat is usually defined as Montane Ash forest dominated by Mountain Ash, Alpine Ash and Shining Gum with a dense understorey of Acacia and an abundance of large hollow-bearing trees (Principal reasons at [89]).

16    The Leadbeater’s Possum is listed as critically endangered under the criterion of “An observed, estimated, inferred, projected or suspected population reduction where the time period must include both the past and the future (up to a max of 100 years in future), and where the causes of reduction may have ceased OR may not be understood OR may not be reversible” based on “an index of abundance known to the taxon” and “[p]opulation reduction, projected or suspected to be met in the future (up to a maximum of 100 years) based on an index of abundance appropriate to the taxon” (Principal reasons at [81]).

17    The primary judge also set out the 2015 Conservation Advice, issued by the Threatened Species Scientific Committee, relating to the Leadbeater’s Possum (Principal reasons at [94]), which included that it has a probability of extinction within the next 100 years of at least 10%, and concluded “[t]he Committee considers the most effective way to prevent further decline and rebuild the population of Leadbeater’s Possum is to cease timber harvesting within montane ash forests of the Central Highlands” (Principal reasons at [102]).

18    The primary judge noted the observation made by one of the expert witnesses, Dr Smith, that: “We are now at the point where the same mistakes that were made with respect to Leadbeater’s Possum can and are being made with respect to the Greater Glider, potentially driving it from vulnerable to endangered” (Principal reasons at [1452]). The primary judge said (Principal reasons at [1453]-[1454]):

Based on the views I have formed of the evidence, that observation has force. The evidence of Professor Woinarski paints a grim picture for the Leadbeater’s Possum: if the present trajectory continues, it may well become extinct in the wild…

There is room for more optimism for the Greater Glider if the threats to its survival and recovery in the wild are mitigated. There can be no doubt that forestry operations are one of the key threats.

19    Despite the clear and pressing need to protect these two species, particularly in the Central Highlands of Victoria, this appeal turns on a technical question of statutory construction. Resolution of this question requires a consideration of whether the EPBC Act (as FLP contends) or Victoria’s statutory forest management system described in the CH RFA (as VicForests contends) applies to VicForests’ past and proposed conduct. As noted, the Greater Glider and Leadbeater’s Possum are protected under both statutory regimes. This Court has jurisdiction over the regime under the EPBC Act and the Victorian Supreme Court has jurisdiction over the regime under the Victorian law.

20    The question is whether the primary judge’s construction of s 38(1) of the EPBC Act, as found in the Separate Question reasons and as adopted in the Principal reasons, is correct, such that, in order to have the benefit of that exemption (and so avoid the approval process in Pt 9 of the EPBC Act), a forestry operation must be compliant with each element of Victoria’s forest management system, including the systems and processes established by the Code, which incorporates the “Management Standards and Procedures for timber harvesting in Victoria’s State forests 2014”. The primary judge said (Principal reasons at [681]):

In the Separate Question reasons (at [155]) I set out my findings about the consequence of the accreditation of the Code under the CH RFA. In substance, I accepted the submissions put on behalf of the Commonwealth about how the legislative schemes were indeed to operate. As I set out there, where a regulatory mechanism such as the Code has a direct bearing on the conduct of forestry operations, then the intention of s 38 and the [Regional Forest Agreement Act 2002 (Vic) (RFA Act)], read with (relevantly here) the CH RFA, is that forestry operations must be undertaken “in accordance” with such a regulatory mechanism to maintain the benefit of the exemption in s 38. I found (at [202]) that the phrase “in accordance with” meant “consistently with” or “in conformity with”. In this way, the EPBC Act, the RFA Act and the RFAs create a substitute regime of regulation not intended to be any less effective in protecting matter of national environmental significance that the scheme in the EPBC Act itself.

21    The consequence of this construction is that a person can become liable to civil or criminal penalty under ss 18 or 18A of the EPBC Act for taking an action in circumstances where it is established that the forestry operation which was undertaken in purported accordance with a Regional Forest Agreement (RFA) is not compliant with each element of a State’s forest management system (as referred to in the relevant RFA) and where the person did not otherwise seek approval of the taking of the action under Pt 9. In other words, the only way a person could be confident that it avoids liability under ss 18 or 18A is to apply in every case for approval under Pt 9 of the EPBC Act, thereby rendering the substitute regime of regulation under the RFAs, and s 38(1) itself, redundant.

22    If, contrary to the preferred construction of the primary judge, the forestry operations undertaken by VicForests were permitted without an approval under Pt 9 of the EPBC Act, because they were governed by the substitute Victorian statutory forest management system described in the CH RFA, then s 38(1) is not displaced, and s 18 is not contravened because it does not apply to an action if Pt 4 lets the person take the action without an approval under Pt 9 (s 19(3)(a)). The consequences that then flow from any breach of the Code (and the Management Standards and Procedures) are those provided for in Pts 6, 7 and 8 of the Sustainable Forests (Timber) Act 2004 (Vic) (SFT Act), which are discussed below.

23    The construction of s 38(1) of the EPBC Act was not, in fact, the direct subject of the separate question before the primary judge. Rather, as set out in the Separate Question reasons, the separate question considered by the primary judge was:

Was the logging of the Logged coupes, and will the proposed logging of the Scheduled Coupes be, RFA forestry operations undertaken in accordance with the Central Highlands Regional Forestry Agreement such that those forestry operations are exempt from the application of Part 3 of the Environment Protection Biodiversity Conservation Act 1999 (Cth) (the EPBC Act), pursuant to either s 38(1) of the EPBC Act or s 6(4) of the Regional Forest Agreements Act 2002 (Cth)?

24    The answer given by the primary judge was (Order 1, 20 April 2018):

Insofar as logging in the coupes described in the separate question has been carried out, or will be carried out, the exemptions in s 38(1) of the Environment Protection and Biodiversity Conservation 1999 (Cth) and s 6(4) of the Regional Forest Agreements Act 2002 (Cth) are not rendered inapplicable to that logging by the failure to carry out reviews of the performance of the Central Highlands Regional Forest Agreement within the relevant time, as contemplated by cl 36 of the Central Highlands RFA.

25    That answer was a successful outcome for VicForests in as far as the primary judge concluded that the exemptions afforded by s 38(1) and s 6(4) respectively continued to apply in respect of the identified forestry operation. Thus, VicForests was not obliged to seek approval for those forestry operations pursuant to Pt 9 of the EPBC Act. In those circumstances, no appeal was brought from the Separate Question reasons.

26    The challenge to the reasoning of the primary judge which led to her preferred construction of s 38(1) of the EPBC Act and s 6(4) of the Regional Forests Agreement Act 2002 (Cth) (RFA Act) arises for the first time in this appeal. Many of the arguments raised in the appeal were not raised before the primary judge. Indeed, many of VicForests’ ultimate arguments in the appeal were not articulated until late in the hearing of the appeal and, only then, in response to questions from the Bench. To a large extent, VicForests’ submissions about construction of s 38(1) of the EPBC Act were unhelpful and, no doubt, the same circumstance prevailed before the primary judge. As a consequence of this fact, FLP argued that, in the alternative, the proper construction of RFA forestry operation in s 4 of the RFA Act led to the same result as that determined by the primary judge. FLP also indicated that it wished to be heard in relation to costs, if unsuccessful in the appeal. Given VicForests’ belated identification of a tenable construction of s 38(1) of the EPBC Act, FLP should be permitted to raise this new argument. VicForests’ apparent inability to articulate a cogent construction of s 38(1) of the EPBC Act before the primary judge and for most of the hearing of the appeal is also relevant to the issue of costs.

SUMMARY OF THE LEGISLATIVE FRAMEWORK

27    The resolution of the essential issues that were before the primary judge depended, in large measure, on the construction and interpretation of the legislative scheme, which was devised over 20 years ago between the Commonwealth and the States, and which continues to be adapted and amended to meet emerging environmental issues.

28    In 1998, the State of Victoria and the Commonwealth entered into an intergovernmental agreement, which has since been amended, called the CH RFA. Similar agreements were entered into between other States and the Commonwealth.

29    The purpose of these agreements (RFAs) was to establish between the Commonwealth and the States a framework for the management and use of native forests. RFAs were intended to provide for the conservation of forests, and the flora and fauna found in them, while allowing for ecologically sustainable management and use of those forests. RFAs were concluded after a process of environmental assessment conducted by the Commonwealth to determine that State forest management systems would provide adequate protection to the environment. This included implementation of a Comprehensive Adequate and Representative (CAR) Reserve System, and implementation of ecologically sustainable forest management (ESFM).

30    The ‘forest management system’ relevant to the CH RFA was originally defined to mean “the State’s suite of legislation, policies, codes, plans and management practices and processes as described in the Victorian Statewide Assessment of Ecological Sustainable Management published by the Commonwealth and Victorian RFA Steering Committee in 1997 as varied by this Agreement” (CH RFA cl 2). At that time, the suite of State legislation comprised some 27 statutes including, most relevantly, the Forests Act 1958 (Vic), the Conservation Forests and Lands Act 1987 (Vic), and the Flora and Fauna Guarantee Act 1988 (Vic).

31    By cl 46 of the CH RFA, the:

Parties agree that Victoria’s forest management system (including its legislation, policies, Codes, plans and management practices) as described in the Statewide Assessment of Ecologically Sustainable Forest Management and including responses reported in Chapter 5 of the Central Highlands RFA Directions Report provides for continuing improvement in relation to ESFM.

32    By cl 47 of the CH RFA, the Commonwealth accredits Victoria’s forest management system for the Central Highlands, where this system is said to include:

    the Forest Management Plan and the process for its review;

    the Flora and Fauna Guarantee Act 1988 (Vic);

    the process for forecasting sawlog sustainable yield in the Central Highlands; and

    the systems and processes established by the Code and the Code of Practice for Fire Management on Public Land.

33    Provision is made for Codes of Practice in Pt 5 of the Conservation Forests and Lands Act 1987 (Vic) (CFL Act). Such Code is made pursuant to the power given to the Minister by s 31 of the CFL Act. Section 31 also empowers the Minister to specify standards and procedures for the carrying out of any of the objects or purposes of a relevant law and, by s 31(2), a Code of Practice may apply, adopt or incorporate any such standard. Clause 1.2.6 of the relevant Code provides that:

1.2.6    The Management Standards and Procedures for timber harvesting in Victoria’s State forests (Management Standards and Procedures) are incorporated into this Code to provide detailed mandatory operational instructions, including region specific instructions for timber harvesting operations in Victoria’s State forests.

34    Section 39 of the CFL Act provides that compliance with a Code of Practice is not required unless it is incorporated in or adopted by a relevant law. Section 46 of the SFT Act provides, inter alia, that VicForests must comply with any relevant Code of Practice relating to timber harvesting. VicForests may be subject to audits of its compliance with the Code (s 47) and is required to respond in writing to any adverse findings (s 48). Any response must be available for public inspection and may be published on the internet (s 49). It is an offence under the SFT Act to undertake unauthorised timber operations (s 45) or to fail to comply with a suspension notice (s 75), which may be issued to any person who is undertaking timber harvesting operations in a State forest (s 70), by an authorised officer who is of the opinion that continuation of the operation would cause imminent damage to the environment or a serious risk to the safety of any person (s 71).

35    It is within the Code that one finds the expression of the precautionary principle (cl 2.2.2.2) which VicForests was found to have breached, or to be likely to breach. VicForests was also found to have breached various miscellaneous provisions of the Code, and various provisions of the Management Standards and Procedures.

36    Subsequent to the decision by the Commonwealth and the States to pursue a national system of RFAs, the Commonwealth enacted the EPBC Act which, in part, exempts forestry operations in regions covered by RFAs from the operation of federal environmental legislation. It also contains a series of prohibitions on conduct that has, or is likely to have, a significant impact on matters of national environmental significance, including those contained in ss 18(2) and 18(4) in relation to listed threatened species.

37    The legislative history is instructive. Section 38 of the EPBC Act, at the time of its commencement, provided:

Division 4 – Forestry operations in certain regions

Subdivision A - Regions covered by regional forest agreements

38    Approval not needed for forestry operations permitted by regional forest agreements

(1)    A person may undertake RFA forestry operations without approval under Part 9 for the purposes of a provision of Part 3 if they are undertaken in accordance with a regional forest agreement.

(2)    In this Act:

Regional forest agreement has the same meaning as in the Regional Forest Agreements Act 1999.

RFA forestry operations has the same meaning as in the Regional Forest Agreements Act 1999.

38    The Regional Forest Agreements Act 1999 (Cth) was never enacted.

39    The Regional Forest Agreements Bill 1998 (Cth) (the Bill) defined a regional forest agreement in precisely the same terms as ultimately enacted by the RFA Act.

40    Regional forestry operations were, however, defined in slightly different terms from those that appear in the RFA Act. Section 3 of the Bill provided:

RFA forestry operations means forestry operations that:

(1)    are conducted in relation to land in a region covered by an RFA (being land where those operations are not prohibited by the RFA); and

(2)    are conducted in relation to a forest (within the meaning of the RFA).

41    This provision indicates that the scope of forestry operations was defined in geographical terms by reference to the region “covered” by an RFA and where the forestry operations are not prohibited by the RFA (an example of such a prohibition being rainforest). The land in the region covered by the CH RFA is defined in cl 4 of that agreement to be “the Central Highlands Region as shown in Map 1 accompanying this Agreement”.

42    Section 5 of the Bill provided:

Certain Commonwealth Acts not to apply in relation to RFA wood or RFA forestry operations

…

(3)    The effect of RFA forestry operations must be disregarded for the purposes of the following:

(a)    section 30 of the Australian Heritage Commission Act 1975;

(b)    approved procedures under section 6 of the Environment Protection (Impact of Proposals) Act 1974 (EPIP Act);

(c)    section 11 of the Environment Protection (Impact of Proposals) Act 1974;

(d)    section 6 of the World Heritage Properties Conservation Act 1983.

43    Section 11 of the Environment Protection (Impact of Proposals) Act 1974 (Cth) (EPIP Act) provided, inter alia, that for the purposes of procedures approved under the Act or for achieving the object of the Act, the Minister may direct that an inquiry be conducted in respect of all or any of the environmental aspects of a matter referred to in any of the paragraphs of s 5, whether or not an environmental impact statement has been furnished to the Minister.

44    The use of the language “must be disregarded” in s 5 of the Regional Forests Agreement Bill (Cth) makes clear that the intention of the proposed Regional Forest Agreement Act 1999 (Cth) was to ensure that the Minister did not direct that an inquiry be conducted in respect of the environmental matters referred to in s 5 in respect of RFA forestry operations.

45    Section 5 of the EPIP Act provided that the object of the Act was to ensure, to the greatest extent that practicable, that matters affecting the environment to a significant extent are fully examined and taken into account in relation to, relevantly: the formulation of proposals; the carrying out of works and other projects; and, the negotiation, operation and enforcement of agreements and arrangements (including agreements and arrangements with, and with authorities of, the States).

46    Section 5A provided, inter alia, that a matter is taken to be a matter affecting the environment to a significant extent if it could threaten with extinction, or significantly impede, the recovery of a listed native species or a listed ecological community, as defined by the Endangered Species Protection Act 1992 (Cth).

47    The EPIP Act was repealed by the Environmental Reform (Consequential Provisions) Act 1999 (Cth) consequent upon the enactment of the EPBC Act. Section 8 of Sch 1 of the Environmental Reform (Consequential Provisions) Act 1999 (Cth) provides that Pt 3 of the EPBC Act does not apply in relation to the negotiation and making of a regional forest agreement for an area described in s 41(1) of that Act when it commenced if the negotiation and making of the agreement is an EPIP activity (being an activity described in s 5(1) of the EPIP Act).

48    In 2002, the Commonwealth enacted the RFA Act. Section 6(4) of that Act provides:

(4)    Part 3 of the Environment Protection and Biodiversity Conservation Act 1999 does not apply to an RFA forestry operation that is undertaken in accordance with an RFA.

49    Clause 1 of Sch 1 to the RFA Act also repealed and substituted s 38 of the EPBC Act to provide, as from 3 May 2002,

Division 4 - Forestry operations in certain regions

Subdivision A - Regions covered by regional forest agreements

38    Part 3 not to apply to certain RFA forestry operations

(1)    Part 3 does not apply to an RFA forestry operation that is undertaken in accordance with an RFA.

   (2)    In this Division:

RFA or regional forest agreement has the same meaning as in the Regional Forest Agreements Act 2002.

RFA forestry operation has the same meaning as in the Regional Forest Agreements Act 2002.

50    It is desirable to describe some aspects of the legislative framework in further detail.

The RFA Act

51    The RFA Act does not give statutory force to any of the obligations imposed on a State by an RFA. Nor is the object of the RFA Act to give effect generally to the provisions of an RFA. Rather, the objects of the RFA Act, as stated in s 3, are:

(a)    to give effect to certain obligations of the Commonwealth under Regional Forest Agreements (emphasis added);

(b)    to give effect to certain aspects of the National Forest Policy Statement; and

(c)    to provide for the existence of the Forest and Wood Products Council.

52    The obligations of the Commonwealth are threefold:

(1)    to remove “RFA wood” or “RFA forestry operations” from the ambit of certain Commonwealth Acts (s 6). In particular, s 6(4) provides that Part 3 of the EPBC Act does not apply to an RFA forestry operation that is undertaken in accordance with an RFA;

(2)    to require the Commonwealth to terminate an RFA only in accordance with the termination provisions of the RFA (s 7); and

(3)    to require the Commonwealth to pay compensation that it is required to pay to a State in accordance with the compensation provisions of an RFA (s 8).

53    Section 4 defines an RFA or Regional Forest Agreement to mean:

an agreement that is in force between the Commonwealth and a State in respect of a region or regions, being an agreement that satisfies all the following conditions:

(a)    the agreement was entered into having regard to assessments of the following matters that are relevant to the region or regions:

(i)    environmental values, including old growth, wilderness, endangered species, national estate values and world heritage values;

(ii)    indigenous heritage values;

(iii)    economic values of forested areas and forest industries;

(iv)    social values (including community needs);

(v)    principles of ecologically sustainable management;

(b)    the agreement provides for a comprehensive, adequate and representative reserve system;

(c)    the agreement provides for the ecologically sustainable management and use of forested areas in the region or regions;

(d)    the agreement is expressed to be for the purpose of providing long-term stability of forests and forest industries;

(e)    the agreement is expressed to be a Regional Forest Agreement.

54    Section 4 also defines RFA forestry operations, relevantly, to mean:

(a)    forestry operations (as defined by an RFA as in force on 1 September 2001 between the Commonwealth and New South Wales) that are conducted in relation to land in a region covered by the RFA (being land where those operations are not prohibited by the RFA); or

(b)    forestry operations (as defined by an RFA as in force on 1 September 2001 between the Commonwealth and Victoria) that are conducted in relation to land in a region covered by the RFA (being land where those operations are not prohibited by the RFA) (emphasis added); or

(c)    harvesting and regeneration operations (as defined by an RFA as in force on 1 September 2001 between the Commonwealth and Western Australia) that are conducted in relation to land in a region covered by the RFA (being land where those operations are not prohibited by the RFA); or

(d)    forestry operations (as defined by an RFA as in force on 1 September 2001 between the Commonwealth and Tasmania) that are conducted in relation to land in a region covered by the RFA (being land where those operations are not prohibited by the RFA).

55    As defined in the CH RFA as in force on 1 September 2001 between the Commonwealth and Victoria, “Forestry operations” means (CH RFA cl 2):

(a)    the planting of trees; or

(b)    the managing of trees before they are harvested; or

(c)    the harvesting of Forest Products.

56    “Forest Products” means all live and dead trees, ferns or shrubs or parts thereof (CH RFA cl 2).

57    Section 6 of the RFA Act makes provision for certain Commonwealth Acts not to apply in relation to RFA wood or RFA forestry operations. Specifically, as noted above, s 6(4) precludes the operation of Pt 3 of the EPBC Act in relation to RFA forestry operations undertaken in accordance with an RFA.

58    Additionally, the RFA Act provides for the publication of RFAs once they have been entered into, or have ceased to be in force (s 9), and for the tabling of RFAs, amendments thereto, and annual and review reports (s 10). These provisions contemplate that RFAs, additional to the five RFAs specifically mentioned in s 4, will be entered into between the Commonwealth and a State.

The EPBC Act

59    The objects of the EPBC Act are stated in s 3(1):

The objects of this Act are:

(a)    to provide for the protection of the environment, especially those aspects of the environment that are matters of national environmental significance; and

(b)    to promote ecologically sustainable development through the conservation and ecologically sustainable use of natural resources; and

(c)    to promote the conservation of biodiversity; and

(ca)    to provide for the protection and conservation of heritage; and

(d)    to promote a co-operative approach to the protection and management of the environment involving governments, the community, land-holders and indigenous peoples; and

(e)    to assist in the co-operative implementation of Australia's international environmental responsibilities; and

(f)    to recognise the role of indigenous people in the conservation and ecologically sustainable use of Australia's biodiversity; and

(g)    to promote the use of indigenous peoples' knowledge of biodiversity with the involvement of, and in co-operation with, the owners of the knowledge.

60    Chapter 2 of the EPBC Act sets out provisions with respect to the protection of the environment.

61    Specifically, Pt 3 within Ch 2 prescribes “Requirements for Environmental approvals”. Pt 3, Div 1, Subdiv C is titled “Listed threatened species and communities”. Within this subdivision, s 18(2) provides, relevantly,

Critically endangered species

(2)    A person must not take an action that:

(a)    has or will have a significant impact on a listed threatened species included in the critically endangered category; or

(b)    is likely to have a significant impact on a listed threatened species included in the critically endangered category.

Civil penalty:

(a)    for an individual – 5,000 penalty units;

(b)    for a body corporate – 50,000 penalty units.

    …

Vulnerable species

(4)    A person must not take an action that:

(a)    has or will have a significant impact on a listed threatened species included in the vulnerable category; or

(b)    is likely to have a significant impact on a listed threatened species included in the vulnerable category.

Civil penalty:

(a)    for an individual – 5,000 penalty units;

(b)    for a body corporate – 50,000 penalty units.

62    The phrase “significant impact” is not defined in the EPBC Act, but it has been held to mean an “impact that is important, notable or of consequence having regard to its context or intensity”: Booth v Bosworth [2001] FCA 1453; (2001) 114 FCR 39 at [99]-[100]; Polaris Coomera Pty Ltd v Minister for the Environment [2021] FCA 254 at [36].

63    Section 19 provides, in the following terms, that “Certain actions relating to listed threatened species” are not prohibited:

(1)    A subsection of section 18 or 18A relating to a listed threatened species does not apply to an action if an approval of the taking of the action by the person is in operation under Part 9 for the purposes of any subsection of that section that relates to a listed threatened species.

…

(3)    A subsection of section 18 or 18A does not apply to an action if:

(a)    Part 4 lets the person take the action without an approval under Part 9 for the purposes of that subsection; or

(b)    there is in force a decision of the Minister under Division 2 of Part 7 that the subsection is not a controlling provision for the action and, if the decision was made because he Minister believed the action would be taken in a manner specified in the notice of the decision under section 77, the action is taken in that manner; or

…

64    Part 4 of Ch 2 provides for “Cases in which environmental approvals are not needed”. These include actions covered by bilateral agreements (Div 1), actions covered by Ministerial declarations and accredited management arrangements or accredited authorisation processes (Div 2), actions covered by Ministerial declarations and bioregional plans (Div 3), actions covered by conservation agreements (Div 3A), and forestry operations in certain regions (Div 4). It is in Div 4 that s 38 appears.

65    Section 38(1) is in essentially the same terms as s 6(4) of the RFA Act.

66    Subdivision B concerns regions subject to a process of negotiating a regional forest agreement.

39    Object of this Subdivision

The purpose of this Subdivision is to ensure that an approval under Part 9 is not required for forestry operations in a region for which a process (involving the conduct of a comprehensive regional assessment, assessment under the Environment Protection (Impact of Proposals) Act 1974 and protection of the environment through agreements between the Commonwealth and the relevant State and conditions on licences for the export of wood chips) of developing and negotiating a regional forest agreement is being, or has been, carried on.

40    Forestry operations in regions not yet covered by regional forest agreements

(1)    A person may undertake forestry operations in an RFA region in a State or Territory without approval under Part 9 for the purposes of a provision of Part 3 if there is not a regional forest agreement in force for any of the region.

(2)    In this Division:

forestry operations means any of the following done for commercial purposes:

(a)    the planting of trees;

(b)    the managing of trees before they are harvested;

(c)    the harvesting of forest products;

and includes any related land clearing, land preparation and regeneration (including burning) and transport operations. For the purposes of paragraph (c), forest products means live or dead trees, ferns or shrubs, or parts thereof.

RFA region has the meaning given by section 41.

…    

67    Section 42 defines, in geographical terms, regions that are RFA regions.

68    Subdivision C puts limits on the application of Div 4. It provides:

42    This Division does not apply to some forestry operation

Subdivisions A [s 38] and B [ss 39-41] of this Division, and subsection 6(4) of the Regional Forest Agreement Act 2002, do not apply to RFA forestry operations, or to forestry operations, that are:

(a)    in a property included in the World Heritage List; or

(b)    in a wetland included in the List of Wetlands of International Importance kept under the Ramsar Convention; or

(c)    incidental to another action whose primary purpose does not relate to Forestry.

69    None of the forestry operations the subject of these proceedings is within the categories described by s 42.

The Code

70    The CH RFA, in cl 67, provides that State forest outside of the CAR Reserve System is available for timber harvesting in accordance with, relevantly, the Code of Forest Practices for Timber Production (defined to mean a version of the Code as in force in 1996). By cl 3(c) of the CH RFA, a reference to a statute or ordinance includes, relevantly, any replacement thereof and any regulations and instruments made under them (thereby including the defined Code of Practice).

71    The Code, made under the power conferred by the CFL Act as discussed above, specifies “standards and procedures for the carrying out of any of the objects or purposes of a relevant law” (s 31).

72    An earlier version of the Code, made in 2007, was the version considered in Environment East Gippsland Inc v VicForests [2010] VSC 335; (2010) 30 VR 1 (Brown Mountain) and MyEnvironment Inc v VicForests [2012] VSC 91. There is no relevant distinction for the purposes of the issues in these proceedings between the key provisions relating to the precautionary principle in the two versions of the Code (Principal reasons at [124]). However, the CH RFA refers to the Code of Forest Practices for Timber Production Revision No 2 1996, a document which makes no reference to the precautionary principle. Express reference to the precautionary principle was introduced by the Code of Practice for Timber Production 2007 (the 2007 Code) and reiterated in the 2014 version of the Code. However, it was not until amendments were made to the CH RFA in March 2020 (after the conclusion of the trial) that reference to the 2014 Code was included.

73    VicForests raised, for the first time in its written submissions in reply, the contention that the 2014 Code is not contemplated by the terms of the CH RFA. This was not a matter raised before the primary judge. Given there is no material difference between the relevant provisions of the 2007 Code and the 2014 Code, it is unnecessary to decide whether the 2014 Code is comprehended by the terms of the CH RFA. Nevertheless, we proceed on the basis that cl 3(c) of the CH RFA operates in accordance with its terms (set out above) irrespective of the apparently more confined language of cl 3(d) of the CH RFA (which provides “a reference to a code or other instrument includes any consolidations or amendments thereof” (emphasis added), and would be sufficient to incorporate the terms of the 2014 Code. VicForests ultimately accepted this proposition during the hearing of the appeal and abandoned its contention to the contrary.

74    The Code is a Code of Practice within the meaning of Pt 5 of the CFL Act and is a prescribed legislative instrument pursuant to item 8.1 of Sch 2 of the Subordinate Legislation (Legislative Instruments) Regulations 2011 (Vic). As such, it is subject to the principles concerning the proper construction of legislation.

75    VicForests is defined to be the “Managing Authority” in the Code for timber harvesting operations conducted under an allocation order (an order by which timber resources are allocated to VicForests from the Crown in right of the State of Victoria).

76    Although s 46 of the SFT Act is the express source of the obligation imposed on VicForests to comply with the Code, that obligation is also recognised in the relevant allocation orders and timber release plans. Further, the CH RFA specifically refers to Victoria’s forest management system as including the Code (CH RFA cl 47).

77    Incorporated into the Code are the Management Standards and Procedures.

78    The Code defines the precautionary principle in the Glossary in these terms:

‘precautionary principle’ means when contemplating decisions that will affect the environment, careful evaluation of management options be undertaken to wherever practical avoid serious or irreversible damage to the environment; and to properly assess the risk-weighted consequences of various options. When dealing with threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

79    The Code provides (emphasis in original):

1.2.4: … The Code applies to the planning and conducting of all commercial timber production and timber harvesting operations on both public and private land in Victoria …

1.2.5: … The Code applies to all land in the State of Victoria that is either being used for or is intended to be used for timber production or timber harvesting operations …

80    The Code describes itself as containing at least three tiers of mechanisms (emphasis in original):

1.2.8    Terminology

The following terms are used in the Code to provide a structure for the Code’s intended outcomes and the mechanisms within the Code to achieve these. The glossary provides further definitions.

A Code Principle is a broad outcome that expresses the intent of the Code for each aspect of sustainable forest management.

An Operational Goal states the desired outcome or goal for each of the specific areas of timber harvesting operations, to meet the Code Principles.

Mandatory Actions are actions to be conducted in order to achieve each operational goal. Timber harvesting managers, harvesting entities and operators must undertake all relevant mandatory actions to meet the objectives of the Code. Mandatory Actions are focussed on practices or activities. Failure to undertake a relevant Mandatory Action would result in non-compliance with this Code.

81    At cl 1.3, the Code then sets out “Code Principles”:

1.3    Code Principles

Timber production on all native forest and plantations in Victoria are guided by the Code Principles described in Table 1. The Code Principles express the broad outcomes of the intent of the Code for each aspect of sustainable forest management.

The six Code Principles are developed from the internationally recognised Montreal Process criteria, and are consistent with the objectives of the Sustainability Charter for Victoria’s State forests. Reporting mechanisms such as Victoria’s State of the Forests Report use the same principles, and demonstrate Victoria’s commitment to being an international leader in sustainable forest management.

The six Code principles are that:

1.    Biological diversity and the ecological characteristics of native flora and fauna within forests are maintained.

2.    The ecologically sustainable long-term timber harvesting capacity of forests managed for timber harvesting is maintained or enhanced.

3.    Forest ecosystem health and vitality is monitored and managed to reduce pest and weed impacts.

4.    Soil and water assets within forests are conserved. River health is maintained or improved.

5.    Cultural heritage values within forests are protected and respected.

6.    Planning is conducted in a way that meets all legal obligations and operational requirements.

Timber production must always be planned and conducted according to knowledge developed from research and management experience so as to achieve the intent of the Code Principles. Application of this knowledge will ensure that timber can continue to be utilised while ensuring that impacts on soil, water, biodiversity, forested landscapes and significant archaeological, historic and other cultural heritage sites are avoided or minimised.

In Table 1, the Operational Goals of the Code are aligned with each Code Principle. These Operational Goals are repeated in the body of the Code, with a variety of Mandatory Actions to achieve each Goal. This framework translates the high level Principles into on-ground action.

82    The relevant parts of Table 1 are set out below:

Extract from Table 1 of the Code

83    This last Code Principle also relevantly requires that a “Forest Coupe Plan which specifies operational requirements is prepared in accordance with this Code prior to the commencement of each timber harvesting operation”.

84    Chapter 2 is then divided into a number of topics. The second topic is relevant to the issues in these proceedings. It is titled “Environmental Values in State forests”, and begins with the statement that:

Timber harvesting operations in native forests may have local impacts on environmental values such as water quality and biodiversity. Appropriate planning and management through the lifecycle of the timber harvesting operation can minimise these impacts. This section includes requirements that must be observed during planning, roading, harvesting, tending and regeneration of native forests.

85    After dealing with water quality, river health and soil protection, in cl 2.2.2 the Code then deals with “Conservation of Biodiversity”.

2.2.2    Conservation of Biodiversity

Operational Goal

Timber harvesting operations in State forests specifically address biodiversity conservation risks and consider relevant scientific knowledge at all stages of planning and management.

Harvested State forest is managed to ensure that the forest is regenerated and the biodiversity of the native forest is perpetuated.

The natural floristic composition and representative gene pools are maintained when regenerating native forests by protecting long-lived understorey species and using appropriate seed sources and mixes of dominant species.

Forest health is monitored and maintained by employing appropriate preventative, protective and remedial measures.

Chemicals are only used where appropriate to the site conditions and are conducted with due care for the maintenance of forest health, water quality, biodiversity and soil values.

Mandatory Actions

Addressing biodiversity conservation risks considering scientific knowledge

2.2.2.1    Planning and management of timber harvesting operations must comply with relevant biodiversity conservation measures specified within the Management Standards and Procedures. (The subject of Order 7)

2.2.2.2     The precautionary principle must be applied to the conservation of biodiversity values. The application of the precautionary principle will be consistent with relevant monitoring and research that has improved the understanding of the effects of forest management on forest ecology and conservation values. (The subject of Orders 1 and 2)

2.2.2.3     The advice of relevant experts and relevant research in conservation biology and flora and fauna management must be considered when planning and conducting timber harvesting operations.

2.2.2.4     During planning identify biodiversity values listed in the Management Standards and Procedures prior to roading, harvesting, tending and regeneration. Address risks to these values through management actions consistent with the Management Standards and Procedures such as appropriate location of coupe infrastructure, buffers, exclusion areas, modified harvest timing, modified silvicultural techniques or retention of specific structural attributes. (The subject of Orders 3, 4 and 5)

2.2.2.5     Protect areas excluded from harvesting from the impacts of timber harvesting operations.

2.2.2.6     Ensure chemical use is appropriate to the circumstances and provides for the maintenance of biodiversity.

2.2.2.7     Rainforest communities must not be harvested.

Perpetuating the biodiversity of harvested native forests

2.2.2.8     Long-term (strategic) forest management planning must incorporate wildlife corridors, comprising appropriate widths of retained forest, to facilitate animal movement between patches of forest of varying ages and stages of development, and contribute to a linked system of reserves.

2.2.2.9     Modify coupe size and rotation periods to maintain a diversity of forest structures throughout the landscape.

2.2.2.10 Retain and protect habitat trees or habitat patches and long-lived understorey species to provide for the continuity and replacement of old hollow-bearing trees and existing vegetation types within each coupe.

2.2.2.11     Use silvicultural systems that suit the ecological requirements of the forest type.

2.2.2.12 Regenerate harvested areas using seed from overstorey species with provenances native to the area.

Maintaining forest health

2.2.2.13 Implement appropriate vehicle and equipment hygiene precautions when moving from areas of known pest plant, pest animal and pathogen infestations.

2.2.2.14 Implement appropriate control actions where timber harvesting operations have introduced or exacerbated a pathogen or weed.

2.2.2.15 Report the suspected introduction of new or unknown exotic agents to DEPI’s Biosecurity section.

2.2.2.16     Where Myrtle Wilt (Chalara australis), Cinnamon Fungus (Phytophthora cinnamomi) or Root Rot (Armillaria) is known to exist, apply appropriate measures to minimise the spread of these pathogens.

86    Clause 2.5.1 of the Code deals with “Coupe Management”. It provides, relevantly:

2.5.1    Mandatory Actions

2.5.1.1    Planning and management of timber harvesting operations must comply with relevant coupe management measures specified in the Management Standards and Procedures. (The subject of Order 6)

2.5.1.2    Timber harvesting operations must be conducted in accordance with the Forest Coupe Plan and all applicable Special Management Zone plans.

2.5.1.3    The location of coupe boundaries, Special Protection Zones, buffers, filters, exclusion areas, areas where special management applies and habitat trees must be easily distinguishable in the field.

2.5.1.4    Timber harvesting operations must only be undertaken within established coupe boundaries as indicated on the Forest Coupe Plan and where required marked in the field, unless the timber harvesting operation is specifically sanctioned or exempted in accordance with this Code.

The Management Standards and Procedures

87    The provisions of the Management Standards and Procedures relevant to the issues in these proceedings are set out below (emphasis in original).

1.    Introduction

1.1 Scope

1.1.1.1    The Management Standards and Procedures apply to all commercial timber harvesting operations conducted in Victoria’s State forests where the Code applies.

1.2    Role

1.2.1.1    This document provides standards and procedures to instruct managing authorities, harvesting entities and operators in interpreting the requirements of the Code.

1.2.1.2    These Management Standards and Procedures do not take the place of the mandatory actions in the Code.

1.2.1.3    Where there is a conflict between the Code and these Management Standards Procedures, the Code shall prevail.

1.3    Application

1.3.1.1    Notwithstanding clause 1.2.1.3, operations that comply with these Management Standards and Procedures are deemed to comply with the Code.

1.3.1.2    Requests for exemptions or temporary variations to these Management Standards and Procedures will demonstrate to the satisfaction of the Minister or delegate that they are consistent with the Operational Goals and Mandatory Actions of the Code.

88    Clause 2 is concerned with “Planning and Record Keeping”. It provides, relevantly:

2.1    FMZ [forest management zone] and planning information

    …

2.1.1.3    Where evidence of a value that requires protection via the establishment or amendment of an SPZ [special protection zone] or SMZ [special management zone] is found in the field application must be made to the Secretary or delegate prior to commencement of the timber harvesting operation to create or amend an SPZ or SMZ in accordance with Appendix 5 the Planning Standards. SMZ applications must be accompanied by and SMZ plan and must be complied with during timber harvesting operations. (The subject of Orders 4 and 5)

89    Clause 4 of the Management Standards and Procedures is concerned with “Biodiversity”. Relevantly, cl 4.1.4 provides:

4.1.4    Central Highlands [Forest Management Areas] FMAs

4.1.4.1    When selecting habitat trees, prioritise hollow-bearing trees where they are present and trees more likely to develop hollows in the short term

4.1.4.2    Scatter habitat trees across the timber harvesting coup in mixed-species forest.

4.1.4.3    Where possible, retain potential hollow-bearing ash eucalyptus in clumps to increase their protection from exposure, windthrow and fire.

4.1.4.4    No gap between retained vegetation is to be greater than 150 m. (The subject of Order 7)

4.1.4.5    Retain habitat trees where they can be most easily protected from damage during harvesting and site preparation treatment.

90    The Management Standards and Procedures contain specific prescriptions for some threatened fauna species, but not all threatened fauna and flora species.

4.2    Fauna

4.2.1.1    Apply management actions for rare and threatened fauna identified within areas affected by timber harvesting operations as outlined in Appendix 3 Table 13 (Rare or threatened fauna prescriptions). (The subject of Orders 4 and 5)

4.3    Flora

4.3.1.1    Apply management actions for rare and threatened flora identified within areas affected by timber harvesting operations as outlined in Appendix 3 Table 14 (Rare or threatened flora prescriptions). (The subject of Order 3)

91    The specific prescriptions in Appendix 3 at Tables 13 and 14 relevant to the Forest Management Areas (RMAs) in the Central Highlands are:

Extract from Management Standards and Procedures Appendix 3, Table 13

Extract from Management Standards and Procedures Appendix 3, Table 14

92    The Management Standards and Procedures deal with “Other values” in cl 5. Relevantly, cl 5.3 provides:

5.3    Landscape

5.3.1    Central Highlands FMAs

5.3.1.1    Retain all mature trees within 20 m of the Monda Track.

5.3.1.2    Apply a 50 m buffer either side of La La Falls walking track.

5.3.1.3    Apply a 50 m buffer either side of Island Creek walking track and a 100 m buffer around the Ada Tree.

Foreground (0 – 500m)

5.3.1.4    Within 500 m of the scenic drives and designated lookouts listed in table 9 in Appendix 5 the Planning Standards, manage timber harvesting operations to ensure landscape alterations are temporary, subtle and not evident to the casual observer.

5.3.1.5    Screen timber harvesting operations (except selective harvesting operations) and new road alignments from view. Use a minimum 20 m vegetation buffer with particular emphasis on the sensitive landscape features listed in table 9 in Appendix 5 the Planning Standards. (The subject of Order 6)

…

GROUNDS OF APPEAL

93    By the time of the hearing of this appeal, VicForests pressed 23 of the grounds raised in its Amended Notice of Appeal, grouped into five categories the subject of challenge:

A.    Loss of exemption from Pt 3 of the EPBC Act;

B.    The precautionary principle;

C.    Miscellaneous alleged breaches of the Code;

D.    Significant impact; and

E.    Relief (only pressed in the event that all of the grounds in sections A-D are rejected).

94    VicForests abandoned Grounds 12, 16, 17, 19, 22, 26, 27, and 28 of its appeal. This is also relevant to the issue of costs.

95    VicForests contends that Ground 1 is dispositive of the appeal and, if successful, must result in the appeal being allowed and orders made substantially in the form sought in its Amended Notice of Appeal. If Ground 1 succeeds, it necessarily follows that Ground 6 must also. VicForests contends that, in that event, it would be unnecessary for the Court to consider the remaining grounds.

96    The obligation of intermediate courts of appeal to consider whether to deal with all grounds of appeal has been explained recently by the High Court. In Boensch v Pascoe [2019] HCA 49; (2019) ALR 15 at [7]-[8] per Kiefel CJ, Gageler and Keane JJ; Bell, Gordon, Nettle and Edelman JJ agreeing at [101], it was said:

[7]    Though it would have been preferable for the primary judge to have made findings on all of the facts that were in contest before him, we would not criticise the Full Court for not addressing an issue raised before it which it did not consider to be dispositive. The principle that an appellate court should confine itself to determining only those issues which it considers to be dispositive of the justiciable controversy raised by the appeal before it is so much embedded in a common law system of adjudication that we have no name for it. In some other systems, it is known as "judicial economy". Judicial economy promotes judicial efficiency in a common law system not only by narrowing the scope of the issues that need to be determined in the individual case but also by ensuring that such pronouncements as are made by appellate courts on contested issues of law are limited to those that have the status of precedent.

[8]    Within the integrated Australian legal system, the mere potential for an appeal to be brought, by special leave, to the High Court provides no reason for an intermediate court of appeal to sacrifice those efficiencies. That is not to deny that there will be occasions when departure from judicial economy will enhance the overall efficiency of the system or that the prospect of an appeal being brought, by special leave, to this Court in a particular case can give rise to such an occasion. There is accordingly no reason to deny that, "although there can be no universal rule, it is important for intermediate courts of appeal to consider whether to deal with all grounds of appeal not just with what is identified as the decisive ground". But a non-universal rule making it important for intermediate courts of appeal to consider whether to deal with all grounds of appeal is quite different from a rule that always or even ordinarily requires those courts to deal with all grounds of appeal. It is important to the efficiency of the system as a whole that intermediate courts of appeal should not feel compelled to treat determination of non-dispositive issues in appeals before them as the norm.

97    For these reasons, and given our conclusion that Ground 1 of the appeal must be sustained, we consider the alternative grounds of appeal in a summary manner.

A. Ground 1 – Loss of exemption from Part 3 of the EPBC Act

98    Ground 1 contends that the primary judge erred in holding that the actual conduct of forestry operations must be undertaken in accordance with the contents of the CH RFA – that is, in compliance with any restrictions, limits, prescriptions, and contents of the Code – in order to secure the benefit of the exemption in s 38(1) of the EPBC Act. VicForests contends that the primary judge ought to have held that, on the proper construction of s 38(1) of the EPBC Act and s 6(4) of the RFA Act, any forestry operations that:

(a)    are forestry operations as defined by an RFA as in force on 1 September 2001; and

 (b)    are conducted in relation to land:

(i)    in a region covered by the RFA; and

(ii)    where those operations are not prohibited by the RFA

are exempt from the operation of Part 3 of the EPBC Act.

99    Grounds 2 6 are advanced in the alternative to Ground 1 and will be discussed later.

100    The issue raised by Ground 1 is a question of statutory construction. The applicable principles, which require consideration of the text, context and purpose, are well established: see, in particular, s 15AA of the Acts Interpretation Act 1901 (Cth); Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69]; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39]; Certain Lloyd’s Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 at [25]-[26]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14]; Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2020] FCAFC 192; (2020) 384 ALR 668 at [4].

101    The primary judge dealt with how the exemption conferred by s 38(1) of the EPBC Act might be lost at [193]-[272] of the Separate Question reasons. The primary judge identified the key factors that led to her conclusion, at [193], as:

    textual considerations in s 38(1), especially the use of the phrase “in accordance with”; and the focus of the provision on forestry operations;

    context: in particular the place of Div 4 (Forestry operations) within Pt 4 of the EPBC Act;

    purpose: which construction best promotes the purpose and objects of the EPBC Act;

    the scheme of the EPBC Act;

    the consequences of the competing constructions;

    why cl 36 [the five yearly review provision] of the Central Highlands RFA is not a compliance provision;

    consistency of the chosen construction with Brown Mountain; and

    the fact that the text, context and purpose of the RFA Act is consistent with this construction.

102    The primary judge rejected VicForests’ submission below that “in accordance with” meant “conducted under”, preferring the construction contended for by FLP, and the intervenors (the Commonwealth and the State of Victoria, neither of whom is a party to the appeal), that the phrase meant “consistently with”, in “conformity with” or “in compliance with”, being consistent with how the phrase was used elsewhere in the EPBC Act.

103    As was also observed by the primary judge, the current form of Div 4 and s 38 of the EPBC Act commenced on 3 May 2002 as a consequence of the passage of the RFA Act (Separate Question reasons at [103]). As noted above, s 38(1) of the EPBC Act and s 6(4) of the RFA Act are in identical terms. The language used in each of those sections does not accord precisely with that used in the other divisions of Pt 3 and so it might be thought that a deliberate choice was made by Parliament in enacting the amendment to s 38 to convey a meaning that does indeed differ from elsewhere in the EPBC Act.

104    VicForests contends that s 38(1) of the EPBC Act operates as a general exemption from the requirements otherwise imposed by Pt 3 of Ch 2 of the Act. The simplified outline of Ch 2, contained in s 11, suggests that such a construction is apposite. It provides:

This Chapter provides a basis for the Minister to decide whether an action that has, will have or is likely to have a significant impact on certain aspects of the environment should proceed.

It does so by prohibiting a person from taking an action without the Minister having given approval or decided that approval is not needed. (Part 9 deals with the giving of approval.)

Approval is not needed to take an action if any of the following declare that the action does not need approval:

(a)      a bilateral agreement between the Commonwealth and the State or Territory in which the action is taken;

  (b)      a declaration by the Minister.

Also, an action does not need approval if it is taken in accordance with Regional Forest Agreements or it is for a purpose for which, under a zoning plan for a zone made under the Great Barrier Reef Marine Park Act 1975, the zone may be used or entered without permission.

(emphasis added)

105    The primary judge noted that, “throughout Pt 4 of the EPBC Act, where the scheme uses the phrase, ‘in accordance with’, it does so as a method of picking up, by a cross-reference, the content of another document or agreement” (Separate Question reasons at [210]).

106    So much may be accepted. Persons are permitted to take an action described in a provision of Pt 3 without an approval under Pt 9 if: such action is approved or taken in accordance with a management arrangement or authorisation process that is a bilaterally accredited management arrangement (Div 1); the action is one of a class declared by the Minister not to require approval because the action is approved in accordance with a management arrangement or authorisation process (Div 2); the action is one declared by the Minister not to require approval because the action is taken in accordance with a particular bioregional plan (Div 3); the action is included in a class of actions declared in a conservation agreement in accordance with s 306A; or, the action is taken in accordance with the conditions (if any) specified in the declaration (Div 3A) (emphasis added).

107    Division 4, however, does not merely permit a person to take an action described in a provision of Pt 3 without an approval under Pt 9; Div 4 excludes the operation of Pt 3 altogether in respect of RFA forestry operations undertaken in accordance with an RFA. In other words, RFA forest operations undertaken in accordance with an RFA cannot be an “action” for the purposes of Pt 3 of the EPBC Act. The primary judge drew attention to the different voice employed in the amended version of s 38, notably the use of the passive voice, but considered that this did not connote any intentional difference in meaning from other provisions of the EPBC Act which state that a “person may take an action”.

108    Other provisions of the EPBC Act which permit a person to take action in certain circumstances use more prescriptive terms than those contained in s 38(1). For example, in Div 3A, s 37M permits a person to take an action without an approval under Pt 9 if, inter alia, “the action is taken in accordance with the conditions (if any) specified in the declaration” (emphasis added). Similarly, in Div 3, s 29 permits a person to take an action without an approval under Pt 9 if, inter alia, the action is one of a class of actions declared a bilateral agreement and, in the case of a bilaterally accredited authorisation process, amongst other matters, the action is taken in accordance with the bilaterally accredited authorisation process (emphasis added).

109    It would have been a simple matter for Parliament to exclude from the ambit of Pt 3 an RFA forestry operation that is undertaken “in accordance with any requirements imposed by or through an RFA”. It did not to do so.

110    The primary judge considered that the original iteration of Div 4, and s 38 in particular, at the commencement of the EPBC Act in July 2000, was instructive in construing the current wording of s 38. As already set out above, the section originally provided:

Subdivision A - Regions covered by regional forest agreements

38    Approval not needed for forestry operations permitted by regional forest agreements

(1)    A person may undertake RFA forestry operations without approval under Part 9 for the purposes of provisions of Part 3 if they are undertaken in accordance with a regional forest agreement.

111    The primary judge said, at [99]-[100] of the Separate Question reasons:

[99]     It is worthwhile noting two matters about the original s 38. The first is that its form – “a person may undertake” is a formulation retained in many of the exception and exemption provisions in the EPBC Act. This form uses the active voice, and directs itself at the person undertaking the action.

…

[100]     Aside from the change in formulation and voice, the substance of the exemption remains as it was enacted with the EPBC Act in 2000. The focus of the provision is on the undertaking of forestry operations: that focus is critical to the conclusion I have reached about the correct construction of s 38. It is of some weight that this has been the focus of s 38, in its context in Pt 4 of Ch 2, since the introduction of the legislative scheme of the EPBC Act.

112    The primary judge considered that the original form, reflecting the form otherwise used throughout Pt 4, confirmed her preferred construction and that “the change in language in 2002 is explained simply by the fact that it was drafted separately and introduced through another piece of amending legislation” (Separate Question reasons at [59]). Such a construction does not sit comfortably with the clear language of s 38(1) – “Part 3 does not apply…”.

113    Of some note is the fact that the headings to Div 4 and to Div 4, Subdiv A remained unchanged despite the amendment to s 38 in 2002. The heading to Div 4 refers to “Forestry operation in certain regions” while the heading to Subdiv A refers to “Regions covered by regional forest agreements” (emphasis added). By contrast, the heading to s 38 itself was changed from “Approval not needed for forestry operations permitted by regional forest agreements” (emphasis added) to “Part 3 not to apply to certain forestry operations” (emphasis added). Consistently with the heading to s 38 and the structure of Div 4, Subdiv A, s 38(1) does not impose any legal obligations on a person conducting a forestry operation in an RFA region.

114    These textual and structural considerations suggest that the use of the words “in accordance with” in s 38(1) was intended to be descriptive of the forestry operation: that is, the operation is one covered by or permitted by the relevant RFA. The exclusion of those operations from Pt 3, by a provision in a separate Division altogether from that which contains Pt 3, reinforces the conclusion that the words “in accordance with” are merely descriptive and not intended to be a class of exemption like the other provisions.

115    Division 4 also draws a distinction between forestry operations undertaken in regions covered by an RFA (Subdiv A) and forestry operations undertaken in regions for which a process of developing and negotiating an RFA is being, or has been carried on (Subdiv B). The former are excluded from Pt 3 of the EPBC Act while the latter are expressed not to require approval under Pt 9 for the purposes of a provision of Pt 3. As submitted by VicForests, “it would be a curious outcome if forestry operations in an RFA region (but where no RFA was in force in that region, i.e. Subdiv B operations) had less stringent environmental controls than RFA forestry operations that are conducted in relation to a region covered by the RFA where those operations are not prohibited by an RFA”. Such is the consequence of the construction given to s 38(1) by the primary judge and contended for by FLP. FLP argues that the focus of s 38(1) is on “the doing of things” (forestry operations) and not on the identification of the geographical region relevant to the particular RFA. For the reasons given, neither the text, structure nor history of the provision suggest that the primary focus of the provision is on anything other than the geographical area the subject of the relevant RFA and then on the forestry operations undertaken within that geographical area.

116    The object of Subdiv B provided for in s 39, being “to ensure that approval under Pt 9 is not required for forestry operations in a region for which a process…of developing and negotiating a regional forest agreement is being, or has been carried on” (emphasis added), reinforces the contention that an RFA forestry operation is “undertaken in accordance with an RFA”, if it is conducted in a region covered by an RFA, where those operations are not prohibited by the RFA.

117    FLP contends that the construction pressed by VicForests is tautologous because it mimics the definition of RFA forestry operation in s 4 of the RFA Act, thereby making the words “that is undertaken in accordance with an RFA” redundant. Such a contention cannot be accepted. If s 38(1) is read harmoniously with s 4 of the RFA Act, it provides:

Part 3 does not apply to [forestry operations that are conducted in relation to land in a region covered by the RFA (being land where those operations are not prohibited by the RFA)] undertaken in accordance with [an agreement that is in force between the Commonwealth and a State in respect of a region that satisfies the following conditions:

(a)    the agreement was entered into having regard to assessments of the following matters that are relevant to the region or regions;

(i)    environmental values, including old growth, wilderness, endangered species, national estate values and world heritage values;

(ii)    indigenous heritage values;

(iii)    economic values of forested areas and forest industries;

(iv)    social values (including community needs);

(v)    principles of ecologically sustainable management;

(b)    the agreement provides for a comprehensive, adequate and representative reserve system;

(c)    the agreement provides for the ecologically sustainable management and use of forested areas in the region or regions;

(d)    the agreement is expressed to be for the purpose of providing long-term stability of forests and forest industries;

   (e)     the agreement is expressed to be a Regional Forest Agreement].

(emphasis added).

118    The words “in accordance with an RFA” are not redundant; they are shorthand for the list of features required for an agreement to meet the definition of an RFA. In other words, and importantly, the words are descriptive of what is required for an agreement to be an RFA.

119    The view that we have reached in relation to the textual considerations of s 38(1) is reinforced by the explanatory materials to both the EPBC Act and the RFA Act. These unequivocally state that the purpose of s 38(1) is to “prevent[ing] the application of Commonwealth environmental and heritage legislation as they relate to the effect of forestry operations where an RFA, based on comprehensive regional assessments, is in place” (revised Explanatory Memorandum to Regional Forest Agreements Bill 1998 cl 4; Commonwealth, Parliamentary Debates, Senate, Second Reading Speech, 12 November 1998, 211 (Rod Kemp)).

120    The Explanatory Memorandum accompanying the Bill that became the EPBC Act describes the object of Div 4, Subdiv B as follows (at p 38):

The object of this subdivision recognises that in each RFA region a comprehensive assessment is being, or has been, undertaken to address the environmental, economic and social impacts of forestry operations. In particular, environmental assessments are being conducted in accordance with the Environment Protection (Impact of Proposals) Act 1974. In each region, interim arrangements for the protection and management of forests are in place pending finalisation of an RFA. The objectives of the RFA scheme as a whole include the establishment of a comprehensive, adequate and representative reserve system and the implementation of ecologically sustainable forest management. These objectives are being pursued in relation to each region. The objects of this will be met through the RFA process for each region and, accordingly, the Act does not apply to forestry operations in RFA regions.

(emphasis added)

121    As was said by the Full Court in Forestry Tasmania v Brown [2007] FCAFC 186; (2007) 167 FCR 34 at [61], “the emphasised passage indicates that the Act does not apply to forestry operations in RFA regions, and the way in which the objects of the Act will be met in relation to those operations is to be ascertained by reference to the relevant RFA”.

122    Similarly, the Revised Explanatory Memorandum accompanying the Bill that became the RFA Act reinforces the message that the EPBC Act does not apply to forestry operations in RFA regions, and that the regime applicable in those regions is found in the RFAs themselves. In relation to cl 6(4) of that Bill, it states (at p 7):

This clause provides that forestry operations in regions subject to RFAs are excluded from certain Commonwealth legislation. This is because the environmental and heritage values of those regions have been comprehensively assessed under relevant legislation during the RFA process and the RFAs themselves contain an agreed framework on the ecologically sustainable development of these forest regions over the next 20 years.

123    The broader purpose behind the exclusion of forestry operations undertaken in accordance with an RFA from the Commonwealth legislation can be gleaned from the Explanatory Memorandum to the Environment Protection and Biodiversity Conservation Bill 1998 (Cth) (EM to EPBC Bill), which identified the problem being addressed as the “division of responsibilities between the Commonwealth, State and Territories, together with a series of government environmental processes which were in need of reform ... to remove unnecessary impediments to business/industry and to improve the effectiveness of environmental protection measures” (EM to EPBC Bill p 6).

124    The EM to the EPBC Bill refers to the 1996 COAG Review of Commonwealth/State Roles and Responsibilities for the Environment and summarises the major outcomes of the Review as reflected in the Bill as being, relevantly (EM to EPBC Bill pp 8-9):

    the Commonwealth focussing on matters of national environmental significance;

    for activities or proposals involving both the Commonwealth and a State, the Commonwealth environmental assessment and approval process being triggered only by those actions which may have a significant impact on matters of national environmental significance;

    improving the efficiency and timeliness of environmental and development approval processes; and

    a reliance on State processes and management approaches which will, as appropriate, accommodate Commonwealth interests.

125    An important feature of the Bill was said to be (EM to EPBC Bill p 11):

A transparent legislative mechanism for accreditation of State assessment processes and, in some cases, State decisions will be adopted. The goal will be to maximise reliance on State processes which meet appropriate standards. Bilateral agreements will provide for Commonwealth accreditation of State processes and, in appropriate cases, State decisions (for example, decisions under agreed management plans). Accordingly, bilateral agreements will allow the Commonwealth to accredit State systems which meet specified criteria. The Bill contains provisions to ensure that the level of protection afforded by State processes must be at least equivalent to the provided by Commonwealth processes.

126    These contextual considerations reinforce our preferred construction of s 38(1). Where an RFA is in force, that agreement will provide for Commonwealth accreditation of State processes. As has already been set out above, by cl 46 of the CH RFA, the Commonwealth and Victoria agreed that Victoria’s forest management system (including its legislation, policies, codes, plans and management practices) provided for continuous improvement in ESFM. By cl 47, the Commonwealth accredited Victoria’s forest management system for the Central Highlands, including the systems and processes established by the Code. It is those systems and processes, together with the remedies available under Victorian law, in particular the offences created by the SFT Act, which govern forestry operations undertaken in the region covered by the CH RFA. Through the process of negotiating the CH RFA, the Commonwealth has accepted its reliance on the State processes and management approaches as being sufficient to accommodate the Commonwealth’s interest.

127    Those systems and processes under Victoria’s forest management system include those relating to endangered species, which might otherwise be subject to the Commonwealth’s requirements in Div 1 (“Requirements relating to matters of national environmental significance”) of Pt 3 of the EPBC Act. In particular, Attachment 2 to the CH RFA provides:

THREATENED FLORA, FAUNA AND COMMUNITIES

Both Parties recognise the range of mechanisms in place to conserve the habitat of rare and threatened flora and fauna in the Central Highlands. These include protection within the CAR Reserve System, protection of key habitats such as rainforest and rare or threatened Ecological Vegetation Classes (EVCs), and the development of Action Statements for species listed under the Flora and Fauna Guarantee Act 1988 and Recovery Plans for species listed under the Endangered Species Protection Act 1992. Parties note that the Recovery Plan for Leadbeater's Possum has been approved under the Endangered Species Protection Act 1992.

128    It is through the interaction of the provisions of the EPBC Act and those of the various RFAs that the objects of the EPBC Act in s 3 are achieved. In particular: to provide for the protection of the environment, especially those aspects of the environment that are matters of national environmental significance; and, to promote ecologically sustainable development through the conservation and ecologically sustainable use of natural resources; and to assist in the cooperative implementation of Australia’s international environmental responsibilities. That co-operative implementation extends to an obligation on the part of Victoria to ensure that it complies with the expectations of the Commonwealth, as described in the “Purpose of Agreement” in Recital A of the CH RFA, being to ensure “the Agreement is durable and that the obligations and commitments that it contains are delivered to ensure effective conservation, forest management and forest industry outcomes”. Should Victoria fail to do so, the Commonwealth can terminate the CH RFA in accordance with cl 92. In such event, all forestry operations within the Central Highlands would cease to be undertaken “in accordance with an RFA” and all would require approval under Pt 9 of the EPBC Act.

129    The same conclusion must apply to the definition of RFA forestry operations in s 4 of the RFA Act. As specified in subsection (b) of the definition, such operations mean “forestry operations (as defined by an RFA as in force on 1 September 2001 between the Commonwealth and Victoria) that are conducted in relation to land in a region covered by the RFA (being land where those operations are not prohibited by the RFA)”. Consistent with the reasoning above, “land in a region covered by the RFA (being land where those operations are not prohibited by the RFA)” means land on which forestry operations are permitted by an RFA, even if the permission is conditional. That is to say, a contravention of a condition of permissibility of the conduct of the forestry operation does not mean that the operation is prohibited by the RFA. Again, the focus of the statutory text is on the geographical area on which the RFA permits forestry operations and not the restrictions, limits, prescriptions, or contents of the Code or an RFA.

130    In light of these reasons, the primary judge’s finding (Separate Question reasons at [155]) that the actual conduct of forestry operations (being an action for the purposes of the EPBC Act) must be undertaken in accordance with the contents of the CH RFA – that is, in accordance with any restrictions, limits, prescriptions, or contents of the Code – in order to secure the benefit of the exemption in s 38(1) cannot be sustained. Ground 1 of the appeal must succeed.

131    We now deal in a summary fashion with the other grounds of the appeal.

B. Grounds 2 to 6 – Alternative grounds to Ground 1

132    In the alternative to Ground 1, VicForests contends by:

    Ground 2 – that the primary judge erred in holding that non-compliance with cl 2.2.2.2 of the Code (being a failure to apply the precautionary principle) will result in the loss of the s 38(1) exemption, and that Pt 3 of the EPBC Act is likely to be engaged.

    Ground 3 – that the primary judge erred in holding that “the harvesting of Forest Products” referred to in paragraph (c) of the definition of ‘forestry operations’ in the CH RFA includes the preparation and promulgation of the Timber Release Plan (TRP); and, in holding that FLP’s pleaded case picks up and relies on the statutory concept of a “forestry operation” at a coupe-by-coupe level, treating each timber harvesting operation (together with all its planning and preparatory phases) as a course of conduct, and that FLP had alleged that in each, some or all of the Scheduled Coupes and the Logged Coupes, VicForests had conducted an RFA forestry operation covering all of VicForests’ activities within that coupe before, during and after harvesting (including its planning for harvesting in that coupe and burning afterwards), as a single course of conduct and a single “RFA forestry operation” for the purposes of s 38(1).

    Ground 4 – that the primary judge erred in holding that if the forestry operation, as pleaded, is not undertaken “in accordance with” the Code as it applies in one respect, then Pt 3 of the EPBC Act applies to that forestry operation as an “action” and the exemption under s 38(1) of the EPBC Act is lost for every aspect of that forestry operation.

    Ground 5 – that, in circumstances where there was no allegation that VicForests’ forestry operations in the Scheduled Coupes would breach the Code insofar as the Leadbeater’s Possum is concerned, and having found that VicForests is not likely to apply the precautionary principle to the conservation of the Greater Glider in the Schedules Coupes, the primary judge erred: in holding that the exemption under s 38(1) of the EPBC Act is lost not only in respect of forestry operations in the Scheduled Coupes insofar as they may impact on the Greater Glider, but also insofar as those operations may impact upon the Leadbeater’s Possum; and in finding that VicForests’ forestry operations in the Scheduled Coupes are likely to have a significant impact on the Leadbeater’s Possum.

    Ground 6 – that the primary judge erred in holding that none of the 66 impugned coupes are subject to the s 38(1) exemption.

133    Assuming that the primary judge’s construction of s 38(1) is correct, the alternative submissions on behalf of VicForests focus on whether various findings by the primary judge that VicForests did or would breach the Code, and her findings as to the scope of the definition of “forestry operations”, mean that the exemption under s 38(1) is lost for every aspect of that forestry operation and in respect of every one of the 66 impugned coupes.

134    As to the circumstances raised by Ground 2, the primary judge held (Principal reasons at [833]):

At [790] to [799] above, I have rejected VicForests’ argument that cl 2.2.2.2 of the Code concerns matters of degree and judgment in a way that renders it not susceptible to clear application in a given factual situation, and I have rejected the purported conclusion that non-compliance with cl 2.2.2.2 cannot result in the loss of the s 38(1) exemption. Clause 2.2.2.2 is a mandatory action under the Code. Section 46 of the SFT Act imposes a mandatory obligation on VicForests to comply with the Code. The substitute regulatory regime, which was accredited by the CH RFA, could not be clearer about VicForests’ legal obligation to apply the precautionary principle to the conservation of biodiversity values, including doing so in the conduct of its RFA forestry operations in native forest in Victoria, and, relevantly here, in the CH RFA region. Non-compliance with this obligation will result in the s 38(1) exemption not being applicable, and Pt 3 of the EPBC Act is likely to be engaged.

135    VicForests submits that non-compliance with cl 2.2.2.2 ought not lead to a loss of exemption under s 38(1). It is argued that the primary judge ought to have held, consistent with [49]-[51], [175], [186], [196], [208]-[209] and [243] of the Separate Question reasons, that cl 2.2.2.2 of the Code concerns matters of degree and subjective judgment which are not sufficiently clear and capable of practical implementation in a given factual situation, such that non-compliance with cl 2.2.2.2 will not result in the loss of the s 38(1) exemption.

136    In particular, VicForests points to the Separate Question reasons at [49] where the primary judge said:

Pt 3 creates criminal offences and imposes civil penalties for contraventions of the prohibitions. The target of these offences and civil penalty provisions are those people or entities who take an “action”. A construction which promotes clarity and an understanding of what, practically, is required to comply with the law will generally be preferred over one which creates, or is likely to create, ambiguity or uncertainty for those whose conduct is being regulated.

137    VicForests submits that, on its own terms (and having regard to the definition of “precautionary principle” in the Code’s Glossary), cl 2.2.2.2 does not direct any particular outcome in any given scenario. Thus, it is argued, the precautionary principle is in a different category to those prescriptions capable of clear and objective practical application. It does not provide an actor, prior to taking an “action” in a given coupe, with a clear understanding of what, practically, is required to comply with the law and avoid exposure to potential criminal consequences under the EPBC Act.

138    FLP contends that there is no substance to the characterisation of cl 2.2.2.2 as merely exhortatory and adopts the primary judge’s observation (Principal reasons at [795]) that, “the content of the precautionary principle is no more a matter of ‘degree and subjective judgment’ than the concept of significant impact in Pt 3”, as both “may have a qualitative or evaluative aspect, but making findings of that kind is a familiar task for a court, no different for example than deciding what is ‘reasonable care’”.

139    FLP’s submissions must be accepted. The primary judge did not err as proposed in Ground 2.

140    Under the CH RFA, and in particular cll 47 and 67, Victoria’s forest management system includes, and requires compliance with, amongst other things, the Code (which, as VicForests accepted in the appeal, means the Code as made in 2014 in accordance with cll 3(c) and/or (d) of the CH RFA). This obligation is reflected in s 46 of the SFT Act which provides specifically that VicForests must comply with any relevant Code of Practice relating to timber harvesting. By s 3 of the SFT Act, a Code of Practice has the same meaning as in s 3 of the CFL Act. As noted, the Code was made under s 31(1) of the CFL Act and is a Code of Practice within the meaning of that Act.

141    VicForests’ submissions are inconsistent with the terms of the Code. The Code identifies the application of the precautionary principle as a mandatory action. By cl 1.2.8 of the Code, a failure to apply the precautionary principle leads to non-compliance with the Code. In other words, the terms of the Code do not enable any argument to be put that cl 2.2.2.2 involves matters of subjective evaluation incapable of constituting a breach of the Code with legal consequences.

142    VicForests’ argument relating to Ground 2 is also logically incoherent. VicForests’ contention in Ground 1 is that the State’s forest management system as accredited by the Commonwealth exclusively regulates the conduct of VicForests in respect of an RFA forestry operation. By s 46 of the SFT Act, VicForests is bound to comply with the Code, including cl 2.2.2.2. VicForests accepts that threatened or actual contraventions of s 46 of the SFT Act by non-compliance with cl 2.2.2.2 of the Code may result in injunctive relief against it, consistent with the reasoning in Brown Mountain and MyEnvironment. If cl 2.2.2.2 is capable of founding injunctive relief by a State court, it is equally capable of founding such relief, and civil and criminal penalties, by this Court under the EPBC Act (assuming, contrary to our conclusion under Ground 1, it applies). VicForests has not confronted this incoherence in its written or oral submissions in support of the appeal.

143    Further, as FLP submitted, the fact that a statutory requirement may be difficult to apply does not render it incapable of application: Monis v The Queen [2013] HCA 4; (2013) 249 CLR 92 at [338]. Where Parliament intends that a court should apply a value judgment, even if the value judgment concerns criminal liability, the court must give effect to the will of Parliament: Taikato v The Queen [1996] HCA 28; (1996) 186 CLR 454 at 466. Here, the inclusion of cl 2.2.2.2 in the Code and the relevance of the Code to the application of both the Commonwealth (if we are wrong about Ground 1) and State statutory regimes indicates that it is the will of both Parliaments (Victorian and Commonwealth) that courts give meaning and effect to the obligation in cl 2.2.2.2 of the Code. In any event, vagueness or uncertainty of the law does not render it incapable of application: Brown v Tasmania [2017] HCA 43; (2017) 261 CLR 328 at [149], [306], [448]-[456], and [506]-[508].

144    We also agree with FLP that the distinction which VicForests attempts to draw between provisions of the Code requiring subjective evaluation and those said by VicForests to be “of clear and objective practical application” should not be accepted. At [792] of the Principal reasons, the primary judge clearly explained that making findings which involve a qualitative or evaluative aspect are familiar to the Court. For these reasons Ground 2 of the appeal must be rejected.

145    As to the circumstances raised by Ground 3, VicForests contends that the primary judge erred in holding that “the harvesting of Forest Products” referred to in paragraph (c) of the definition of “Forestry Operations” in the CH RFA includes the preparation and promulgation of the TRP. VicForests contends that the preparation of the TRP should fall within the definition in paragraph (b), being management of trees before they are harvested.

146    VicForests argues that, in making this finding, the primary judge ignored the fact that the preparation of the TRP is governed by provisions contained in Pt 5 of the SFT Act entitled “Management of timber resources by VicForests”. Part 5 of the SFT Act relates to timber resources which have vested in VicForests on gazettal of the relevant allocation order in accordance with s 13 of the SFT Act. VicForests draws attention to the distinction in Pt 5, which specifies how timber resources are to be managed from the point of vesting through to the conduct of operations, and Pt 6, which is entitled “Management of timber harvesting”, which mandates compliance with the Codes of Practice and Pt 7 which is entitled “Conduct of timber harvesting operations”.

147    VicForests argues that it is clear that the preparation and promulgation of the TRP falls within para (b) of the definition of ‘forestry operations’ in the CH RFA but not within para (c).

148    Ground 3 is misconceived. There is no inconsistency in her Honour’s reasoning, nor any denial of procedural fairness by her Honour. The primary judge recognised that FLP had not pleaded that the preparation and promulgation of the TRP was a forestry operation that must comply with cl 2.2.2.2 of the Code (Principal reasons at [418] and [716]). The pleaded issue was whether VicForests had “complied with the Code in the conduct of its forestry operations in the impugned coupes – that is, the harvesting of forestry products” (Principal reasons at [718]). The primary judge considered that the TRP was relevant to that issue (Principal reasons at [415] and [730]). This is because the TRP specified what was planned or required to occur in terms of harvesting timber (Principal reasons at [731]). The fact that the TRP is made under the SFT Act does not mean that the primary judge erred in deciding that the TRP was within the scope of para (c) of the definition of “Forestry Operations” in the CH RFA. The primary judge did not misunderstand VicForests’ case. She simply rejected that argument. VicForests does not explain why the primary judge was wrong to conclude that the TRP is relevant to the harvesting of timber (Principal reasons at [718]-[722], [728]-[731]).

149    Nor does anything in her Honour’s reasons involve any procedural unfairness to VicForests. The TRP was obviously relevant to the pleaded issue of VicForests’ compliance with the Code. Even if VicForests did not anticipate that her Honour would accept this argument by FLP, VicForests has not identified any material effect on it as a result. The mere speculation that it might have run its case differently before the primary judge does not established any practical injustice to it.

150    For these reasons Ground 3 of the appeal must be rejected.

151    As to Grounds 4-6, VicForests contends that the primary judge ought to have held that:

(a)    as the only alleged non-compliance with the CH RFA in respect of the Scheduled Coupes and the Logged Coupes (other than the alleged miscellaneous breaches) related to allegations of non-compliance with cl 2.2.2.2 of the Code in respect of the Greater Glider, any loss of the exemption under s 38(1) of the EPBC Act in respect of those coupes was limited to forestry operations insofar as they affect the Greater Glider, and questions of significant impact in respect of other values (such as Leadbeater’s Possum) do not arise.

(b)    in the absence of any pleaded case against it that its forestry operations in the Scheduled Coupes would not comply with the Code insofar as the Leadbeater’s Possum is concerned, the s 38 exemption was not lost in any of the Scheduled Coupes insofar as those operations may impact upon the Leadbeater’s Possum.

(c)    each of the 66 impugned coupes was subject to the s 38(1) exemption.

152    VicForests argues that the use of the singular term “an RFA operation” in s 38 focuses attention on a particular forestry operation that is conducted in relation to land (coupes) in the CH RFA area. It says that forestry operations are the actions that the EPBC Act seeks to regulate so as to avoid significant impact on a listed threatened species and that it is the taking of the action, that is, the actual conduct of a forestry operation which must be taken “in accordance with” the RFA.

153    VicForests contends that as the only alleged breach said to arise in respect of the forestry operations in the Scheduled Coupes is the alleged failure by it to comply with cl 2.2.2.2 of the Code in respect of the Greater Glider, this is the only respect in which it is alleged that the RFA forestry operation is not being undertaken in accordance with an RFA. Consequently, any loss of exemption under s 38 in respect of the Scheduled Coupes is limited to proposed forestry operations insofar as they affect the Greater Glider, and questions of significant impact to other values (such as Leadbeater’s Possum) do not arise.

154    Likewise, it is contended, the alleged breach said to arise in respect of the forestry operations in the Logged Glider Coupes is the failure to comply with cl 2.2.2.2 of the Code in respect of the Greater Glider. If the exemption in s 38(1) were lost in respect of the Logged Glider Coupes, it would be because the conduct of the forestry operation did not comply with cl 2.2.2.2 of the Code in respect of the Greater Glider. The exemption would continue to apply to other forestry operations insofar as they are undertaken in accordance with the RFA and questions of significant impact are limited to the Greater Glider only.

155    VicForests submits that the construction of s 38(1) accepted by the primary judge, where a breach of the Code concerning a Tree Geebung would expose the entirety of the forestry operations to the EPBC Act, would render the substitute regimes established by the RFAs otiose once the exemption in s 38(1) no longer applies, and open up questions of significant impact on every matter of environmental significance. It ignores the substitute regime envisaged by Pt 4, Div 4 of the EPBC Act.

156    FLP counters that the primary judge’s construction and application of s 38 was orthodox and her Honour correctly found that: s 38(1) operates on a “forestry operation”; the case as pleaded was that in each coupe, VicForests had conducted an RFA forestry operation, and that allegation covered all of VicForests activities within that coupe, before, during and after harvesting, as a single course of conduct and a single “RFA forestry operation”; if that RFA forestry operation, as pleaded, was not undertaken “in accordance with” the Code, then the exemption was lost for whatever, factually, was identified as the RFA forestry operation; and, Pt 3 of the EPBC Act applied to that RFA forestry operations as an “action” (Pt 3 does not apply to any particular “value”).

157    As submitted by VicForests, the construction arrived at by the primary judge means that any breach of the Code would lead to a complete loss of exemption in respect of the entire forestry operations within a coupe. Non-compliance with a prescription concerning one value (eg. to protect mature individuals of Tree Geebung from disturbance where possible) would require the Minister to consider all aspects of the entire forestry operation, including, for example, Leadbeater’s Possum even where there has been no non-compliance with prescriptions relating to Leadbeater’s Possum in the Code. VicForests argues that such an interpretation of s 38(1) produces an unreasonable and absurd consequence and this indicates that this construction is not one intended by Parliament.

158    VicForests’ contentions relating to Grounds 4-6 are unsustainable for the reasons given by the primary judge. Her Honour’s reasoning in this regard involves no error. As her Honour found: s 38(1) of the EPBC Act concerns an “RFA forestry operation” (Principal reasons at [787]); and, nothing in the text, context or purpose of s 38(1) suggests that the provision may be engaged or disengaged in part by reference to any particular environmental value (Principal reasons at [789]). It necessarily follows that VicForests’ submission that if the s 38(1) exemption is lost because of a failure to comply with cl 2.2.2.2 of the Code in respect of the Greater Glider, then the extent of the lost exemption is confined to any action for the purposes of Pt 3 of the EPBC Act which may impact on the Greater Glider is irreconcilable with the terms of s 38(1) and its function in regulating the application of Pt 3.

159    In reality, VicForests’ arguments in this regard are relevant to its case under Ground 1 concerning the proper construction of s 38(1). It is necessary to assess the arguments assuming that Ground 1 is decided against VicForests. Once that assumption is made, the illogicality and incoherence of these grounds of appeal is clear. Section 38(1) either does or does not apply to an RFA forestry operation. If it applies, Pt 3 of the EPBC Act does not apply to the RFA forestry operation. If it does not apply, Pt 3 of the EPBC Act may apply to the RFA forestry operation (depending on one or other of the Pt 3, Div 1 triggers being engaged or not). The required level of focus is always on the RFA forestry operation. An RFA forestry operation cannot be characterised as an operation in part and only to the extent the operation effects some or other environmental value. VicForests’ submissions to the contrary are divorced from the statutory provisions, assuming (contrary to our conclusion) that Ground 1 is decided against VicForests.

160    For these reasons Grounds 4 to 6 of the appeal must be dismissed.

C. Grounds 7 to 15 – The precautionary principle

161    Grounds 7 – 15 challenge the primary judge’s findings in relation to the application of the precautionary principle and the evidential basis for those findings.

162    VicForests contends by:

    Ground 7 – that the primary judge erred in holding that the precautionary principle in cl 2.2.2.2 of the Code is not subject to two conditions precedent, namely a threat of serious or irreversible environmental damage, and scientific uncertainty as to the environmental damage.

    Ground 8 – that the primary judge erred in construing the precautionary principle in cl 2.2.2.2 of the Code as requiring that measures be taken that assist in arresting and reversing the decline, and therefore facilitating the recovery, of the relevant threatened species.

    Ground 9 – that the primary judge erred in holding that: cl 2.2.2.2 of the Code requires VicForests to take a precautionary approach when it is “dealing” with a situation where there are threats of serious or irreversible damage, irrespective of the source of those threats; and, as a consequence, much of Dr Davey’s opinions were of marginal relevance because his analysis assumed that the relevant question was whether forestry operations in the Logged Coupes posed a serious or irreversible threat to the Greater Glider (emphasis added).

    Ground 10 – that the primary judge erred in finding that, in undertaking forestry operations in the Scheduled Coupes, VicForests is not likely to apply the precautionary principle to the conservation of biodiversity values in those coupes, as required by cl 2.2.2.2 of the Code.

    Ground 11 – alternatively to Ground 10, that the primary judge erred in finding that VicForests will not use less intensive silvicultural methods in the Scheduled Coupes than has been its historical practice; and that even if VicForests were to conduct its forestry operations in the Scheduled Coupes using less intensive silvicultural methods, this would not lead to any different or better compliance with cl 2.2.2.2 of the Code.

    Ground 12 – that the primary judge erred in ruling on 7 June 2019 that the additional coupes evidence was admissible evidence (VicForests did not press this ground).

    Ground 13 – that, having admitted the additional coupes evidence, the primary judge erred in finding that that evidence confirmed the primary judge’s view that VicForests is unlikely to comply with cl 2.2.2.2 of the Code in the Scheduled Coupes in the foreseeable future.

    Ground 14 – that, in circumstances where it was not part of FLP’s pleaded case, the primary judge erred in holding that VicForests had failed to comply with cl 2.2.2.2 of the Code in the conduct of its forestry operations due to a lack of practical, specific, attention to the difficulties with Timber Harvesting Exclusion Zones (THEZs) highlighted in Professor Woinarski’s report.

    Ground 15 – that, in respect of the evidence of Professor Baker, the primary judge erred in finding that Professor Baker was not an independent expert and that Professor Baker’s evidence contained “serious flaws” and should be rejected.

163    As to Ground 7, VicForests contends that the primary judge ought to have held that the application of the precautionary principle in cl 2.2.2.2 of the Code and the concomitant need to take precautionary measures is triggered by the satisfaction of two conditions precedent: first, a threat of serious or irreversible environmental damage; and second, scientific uncertainty as to the environmental damage, in accordance with the approach taken by Osborn J in Brown Mountain at [187]-[188]. Although Brown Mountain considered the 2007 Code, there is no material difference between that version and the current version for the purposes of this proceeding.

164    Clause 2.2.2.2 has been set out earlier, but it is convenient to restate it here:

The precautionary principle must be applied to the conservation of biodiversity values. The application of the precautionary principle will be consistent with relevant monitoring and research that has improved the understanding of the effects of forest management on forest ecology and conservation values.

165    The definition of ‘precautionary principle’ in the Glossary to the Code has also been set out earlier but we repeat it here, as well as the definition of ‘biodiversity’, for convenience:

‘biodiversity’ means the natural diversity of all life: the sum of all our native species of flora and fauna, the genetic variation within them, their habitats, and the ecosystems of which they are an integral part.

‘precautionary principle’ means when contemplating decisions that will affect the environment, careful evaluation of management options be undertaken to wherever practical avoid serious or irreversible damage to the environment; and to properly assess the risk-weighted consequences of various options. When dealing with threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

166    The primary judge held, at [843]-[844] of the Principal reasons, that the precautionary approach required by the Code, which must be undertaken, as cl 2.2.2.3 makes clear, in accordance with advice from relevant experts and relevant research in conservation biology and flora and fauna management, and with which VicForests must comply, is:

[i]n its timber harvesting operations (an in planning for them) VicForests must:

(a)    carefully evaluate its own management option to wherever practical avoid serious or irreversible damage to the environment (here, relevantly, to the Greater Glider); and

(b)     properly assess the risk-weighted consequences of various options.

167    The primary judge held that the second sentence within the definition of the precautionary principle is a secondary or consequential aspect of the obligation under cl 2.2.2.2 which means, that if the circumstances of a person’s forestry operations “mean it is ‘dealing’, objectively, with circumstances where there are likely to be threats of serious environmental damage or threats of irreversible environmental damage, then in undertaking its evaluation and assessment of how (and if) those forestry operations should be conducted, [the person] cannot justify its lack of measures to prevent environmental degradation by relying on a lack of scientific certainty about what it needs to do” (Principal reasons at [845]).

168    This is the essence of the difference of approach between the primary judge and Osborn J: the former interpreting the second sentence as a secondary or consequential obligation; the latter held that it imposes two conditions precedent or thresholds.

169    The statutory expression of the precautionary principle in s 391 of the EPBC Act is as follows:

The precautionary principle is that lack of full scientific certainty should not be used as a reason for postponing a measure to prevent degradation of the environment where there are threats of serious or irreversible environmental damage.

170    Similarly worded provisions articulating the principles of ecologically sustainable development have been described as statutory expressions of the precautionary principle: see Australian Conservation Foundation Incorporated v Minister for the Environment [2016] FCA 1042; (2016) 251 FCR 308 at [12]. Section 3A(b) of the EPBC Act provides:

… if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

171    These statutory provisions reflect cl 3.5.1 of the Australian Intergovernmental Agreement on the Environment, 1 May 1992 (Intergovernmental Agreement), contained in the Schedule to the National Environment Protection Council Act 1994 (Cth) which provides:

3.5.1 precautionary principle –

Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measure to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by:

i.    careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and

ii.    an assessment of the risk-weighted consequences of various options.

172    Further, Principle 15 of the Rio Declaration on Environment and Development 1992 (Report of the United Nations Conference on Environment and Development, 3-14 June 1992, Annex 1) states:

In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

173    Both of these intergovernmental agreements articulate the precautionary principle in terms that place primacy on the existence of the threshold issues of a threat of serious or irreversible environmental damage and a lack of full scientific certainty. The Intergovernmental Agreement is explicit that these two issues are threshold issues or conditions precedent before proceeding to describe the appropriate approach to decision-making.

174    Section 5(4)(b) of the SFT Act, the statute which requires VicForests to comply with the Code (s 49), uses similar language.

175    These statutory expressions of the precautionary principle encapsulate the two matters that Osborn J draws from the definition in the Code as threshold issues.

176    The text of the Code inverts the statement of the precautionary principle itself with the statement of the actions to be taken when contemplating a decision.

177    The primary judge reasoned (Principal reasons at [836]) that there were two relevant Operational Goals (where an ‘Operational Goal’ is defined in the Code as “the desired outcome or goal for each of the specific areas of timber harvesting operations to meet the Code Principles”) for cl 2.2.2. These Operational Goals are:

…

Timber operations in State forests specifically address biodiversity conservation risks and consider relevant scientific knowledge at all stages of planning and management.

Harvested State forest is managed to ensure that the forest is regenerated and the biodiversity of the native forest is perpetuated.

178    The primary judge continued:

838    Seven mandatory actions are stipulated to achieve [the] first Operational Goal. One is cl 2.2.2.2. A mandatory action is defined in the Code [as] an action “to be conducted in order to achieve each operational goal”. Clause 1.2.8 states:

Timber harvesting managers, harvesting entities and operators must undertake all relevant mandatory actions to meet the objectives of the Code. Mandatory Actions are focussed on practices or activities. Failure to undertake a relevant Mandatory Action would result in non-compliance with this Code.

(Emphasis added.)

839    There is nothing equivocal or optional about these provisions. They are not conditioned on VicForests’ satisfaction, or any other person’s satisfaction, that the mandatory actions are appropriate or justified. They are consistent with the obligatory language in s 46 of the SFT Act.

840    The applicant’s submissions paid attention to cl 2.2.2.2 itself, but VicForests’ did not. The first sentence of cl 2.2.2.2 of the Code provides:

The precautionary principle must be applied to the conservation of biodiversity values.

(Emphasis added.)

841    There is no equivocation in this statement. To comply with the Code, in its timber harvesting, VicForests must apply the precautionary principle to the conservation of biodiversity values. And how must it do so? It is clear from the definition of the precautionary principle, that VicForests is to do so by:

when contemplating decisions that will affect the environment, [engaging in] careful evaluation of management options be undertaken to wherever practical avoid serious or irreversible damage to the environment; and to properly assess the risk-weighted consequences of various option.

179    The primary judge was not persuaded that she should adopt the approach taken by Osborn J to the operation of the precautionary principle in Brown Mountain, essentially on the basis that Osborn J had accepted the analysis of the principle as it had been stated by Preston CJ in Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133; (2006) 67 NSWLR 256. The primary judge observed that Telstra was concerned with a different text and an entirely different statutory scheme (Principal reasons at [827]), and that statutory context is important, as is the particular textual expression of the precautionary principle, in its particular context (Principal reasons at [819]).

180    Despite Osborn J’s acceptance of the principle as stated by Preston CJ, albeit having arisen in a different statutory context, Brown Mountain itself was concerned with cl 2.2.2.2 of the Code. Osborn J articulated the principles relevant to that provision:

    if the conditions precedent are satisfied (a threat of serious or irreversible environmental damage and a lack of full scientific certainty), the burden of showing the threat of serious or irreversible environmental damage will not occur shifts to the proponent of the relevant action (Brown Mountain at [199]);

    the precautionary principle permits the taking of preventative measures without having to wait until the reality and seriousness of the threat have been fully known (Brown Mountain at [201]);

    the precautionary principle is not however directed to the avoidance of all risks (Brown Mountain at [203]);

    the degree of precaution appropriate will depend on the combined effect of the seriousness of the threat and the degree of uncertainty (Brown Mountain at [204]);

    the margin for error in respect of a particular proposal may be controlled by an adaptive management approach (Brown Mountain at [205]);

    the precautionary principle requires a proportionate response. Measures should not go beyond what is appropriate and necessary in order to achieve the objective in question. The principle requires the avoidance of serious or irreversible damage to the environment ‘wherever practical’. It also requires the assessment of the risk-weighted consequences of optional courses of action (Brown Mountain at [207];

    a reasonable balance must be struck between the cost burden of the measures and the benefit derived from them (Brown Mountain at [208]);

    the relevant notion of proportionality is however not readily captured by traditional cost benefit analysis (Brown Mountain at [209]);

    the triggering of the precautionary principle does not necessarily preclude the carrying out of a particular land use or development proposal (Brown Mountain at [210]); and

    the precautionary principle may also require consideration in the context of other principles of environmentally sustainable development (Brown Mountain at [211]).

181    The primary judge observed that it was not clear whether VicForests embraced the aspect of Osborn J’s reasoning whereby, once the two conditions precedent have been established, there is a shifting of the evidential burden of proof to show that the threat does not in fact exist, or is negligible (Principal reasons at [817]).

182    The primary judge considered it unnecessary to grapple with the shifting of the burden of proof to VicForests about the non-existence of a threat to the threatened species if Osborn J’s reasoning were adopted because the argument put by FLP in these proceedings was not put to Osborn J and so his approach could be distinguished (Principal reasons at [818]).

183    It is not necessary to resolve this aspect of the appeal. In short, to the extent that the primary judge may have erred in departing from Brown Mountain without finding that it was plainly wrong, the error is immaterial. The primary judge held that, even applying the approach taken by Osborn J, she would have found that the precautionary principle was engaged as forestry operations in the CH RFA region do pose a serious threat to the Greater Glider (Principal reasons at [829]).

184    Accordingly, Ground 7 cannot succeed.

185    As to Ground 8, VicForests contends that the primary judge ought to have held that, properly construed, the precautionary principle in cl 2.2.2.2 of the Code is not directed to the avoidance of all risks. It is said that it is at least implicit in the Principal reasons that the primary judge did not consider the principles identified by Osborn J as encompassed in the preferred construction of the precautionary principle in the Code and that a departure from Osborn J’s construction required a finding that his Honour was plainly wrong; no such finding was made.

186    The primary judge did not find that all risks must be avoided. To the extent that an implication to that effect is sought to be found in the Principal reasons, VicForests’ contention cannot succeed.

187    VicForests contends further that, to the extent that the primary judge construed the precautionary principle as requiring that measures be taken to arrest and reverse a decline in threatened species at [630] of the Principal reasons, that elevates a purpose of environmental protection above timber production and should not be preferred. FLP argues that the conclusion that the Code, including cl 2.2.2.2, contemplates that species be assisted to recover was arrived at on the basis of an orthodox process of statutory construction.

188    The primary judge’s analysis of this point commenced with s 3(2)(e)(i) of the EPBC Act (Principal reasons at [626]), which provides that, in order to achieve its objects, the Act:

(e)    enhances Australia’s capacity to ensure the conservation of its biodiversity by including provisions to:

(i)    protect native species (and in particular prevent the extinction, and promote the recovery, of threatened species) and ensure the conservation of migratory species;

…

(emphasis added)

189    The primary judge then referred to s 270(1) of the EPBC Act which describes the content and purpose of Recovery Plans: “to stop the decline of, and support the recovery of, the listed threatened species … so that its chances of long-term survival are maximised” (Principal reasons at [627]). Her Honour considered that recovery forms part of the objective present in the Code, expressed at cl 1.3, “biological diversity and the ecological characteristics of native flora and fauna within forests are maintained” (Principal reasons at [629]). The primary judge continued (at [630]):

To similar effect are the operational goals in cl 2.2.2 of the Code (see [137] above). In order for a threatened species to be “maintained” as part of the maintenance of biodiversity, its decline must be arrested and reversed.

190    The primary judge’s conclusions reflect the provisions of the EPBC Act and the Code. In particular, in specifying the relationship between the Code principle that biological diversity and ecological characteristics of native flora and fauna within forests is maintained, the operational goals in Table 1 of the Code require that harvested native forest is managed to ensure the forest is regenerated and the biodiversity of the native forest is perpetuated. To perpetuate biodiversity, including the long-term survival of the Greater Glider and Leadbeater’s Possum, it is necessary to arrest and reverse their rate of population decline. If this is not done it will not be possible for the biodiversity of the native forest to be perpetuated without measures to assist the populations of these threatened species to recover.

191    Ground 8 of the appeal must be rejected.

192    As to Ground 9, VicForests contends that the primary judge ought to have held that cl 2.2.2.2 of the Code requires the relevant forestry operation to pose a threat of serious or irreversible environmental damage before the precautionary principle is engaged and Dr Davey’s opinion that forestry operations undertaken in the Logged Coupes did not pose a threat of serious or irreversible damage to the Greater Glider should have been taken into account.

193    It is argued that, when construing the text of cl 2.2.2.2, the ‘threats’ referred to in the second sentence of the precautionary principle are threats from decisions that will affect the environment within the meaning of the first sentence. In the context of this proceeding, the relevant decisions are to conduct timber harvesting (or forestry) operations in a particular manner; those operations are therefore the subject of the analysis as to whether they constitute “threats of serious or irreversible environmental damage” within the meaning of the second sentence and the conditions precedent. It is said that this is consistent with FLP’s pleaded case as opened.

194    VicForests argues that the primary judge’s conclusion (Principal reasons at [847] and [850]) that the ‘threats’ do not need to be only from forestry operations, in the absence of conducting an analysis as to whether Osborn J was plainly wrong in that regard, was erroneous. There is, however, nothing in the reasons of Osborn J in Brown Mountain that compels such a narrow construction of the precautionary principle. To the contrary, Osborn J drew attention specifically to the factors identified by Preston CJ in Telstra that may be relevant when assessing whether the proposed activities constitute a threat (Brown Mountain at [190]). Those factors included:

(a)    the spatial scale of the threat (for example, local, regional, statewide, national, international);

(b)    the magnitude of possible impacts on both natural and human systems;

(c)    the perceived value of the threatened environment;

(d)    the temporal scale of possible impacts, in terms of both the timing and the longevity (or persistence) of the impacts;

(e)    the complexity and connectivity of the possible impacts;

(f)    the manageability of possible impacts having regard to the availability of means and the acceptability of means;

(g)    the level of public concern, and the rationality of and scientific or other evidentiary basis for the public concern; and

(h)    the reversibility of the possible impacts and, if reversible, the time frame for reversing the impacts and the difficulty and expense of reversing the impacts.

195    It is said then that, on the correct construction of the precautionary principle, Dr Davey’s opinion was directly relevant to an analysis of whether the conditions precedent for the engagement of the precautionary principle were met and the primary judge erred in finding that his opinions were of “marginal relevance” (Principal reasons at [848]).

196    FLP argues that this constitutes an overly narrow view of the obligation imposed by cl 2.2.2.2 and mischaracterises the primary judge’s reasons. FLP points out that the primary judge:

    considered the operational goals of cl 2.2.2 – to ensure that “[t]imber harvesting operations in State forests specifically address biodiversity conservation risks” and that “[h]arvested State forest is managed to ensure that forest is regenerated and the biodiversity of the native forest is perpetuated” (Principal reasons at [836]-[837]);

    recognised that the Code stipulates mandatory actions which must be conducted in order to achieve the operational goal, where, according to cl 1.2.8, “[f]ailure to undertake a relevant Mandatory Action would result in non-compliance with the Code” (Principal reasons at [838]);

    said that one such mandatory action is that set out in cl 2.2.2.2, and based on the first sentence of the definition of the precautionary principle, the obligation to apply the precautionary principle arises whenever VicForests is contemplating decisions in respect of timber harvesting operations (and planning for them) that will affect the environment (Principal reasons at [842]). This required VicForests to “carefully evaluate its management options to wherever practical avoid serious or irreversible damage to the environment” (here, the Great Glider), and “properly assess the risk weighted consequences of various options” (Principal reasons at [843] and [849]);

    as to the second sentence of the precautionary principle, her Honour stated at para [845] of the Principal reasons that it means

… if the circumstances of VicForests’ forestry operations mean it is “dealing”, objectively, with circumstances where there are likely to be threats of serious environmental damage, or threats of environmental damage, then in undertaking its evaluation and assessment of how (and if) those forestry operations should be conducted, VicForests cannot justify its lack of measures to prevent environmental degradation by relying on a lack of scientific certainty about what it needs to do…;

and

    it was in that context that the primary judge said that when VicForests is conducting timber harvesting operations in native forests where the Great Glider is likely to be present, VicForests is ‘dealing’ with that threat of serious damage.

197    We accept FLP’s submission that there was no error in the primary judge’s reasons relating to this issue. As explained above, her Honour’s analysis properly took into account the text and context of cl 2.2.2.2. Further, VicForests’ construction would fail to achieve the operational goals of cl 2.2.2. Ground 9 cannot succeed.

198    As to Ground 10, VicForests contends that the primary judge ought to have found that:

    there were no sufficiently advanced proposals to conduct timber harvesting operations in any of the Scheduled Coupes to enable any ‘threat’ to be properly identified and analysed, and therefore, no engagement of the conditions precedent to the precautionary principle in cl 2.2.2.2 of the Code; and

    alternatively, the evidence, when considered as a whole, does not establish a threat of serious or irreversible damage to the Greater Glider by reason of VicForests’ proposed forestry operations in the Scheduled Coupes.

199    VicForests contends that the evidence before the primary judge revealed that the manner in which the Scheduled Coupes might be harvested was uncertain. Any coupe plans that had in fact been prepared in respect of those coupes were stale and out of date. According to VicForests, relevant uncertainties that could impact on the configurations of the coupes to be harvested include all the matters in subpara 6.3(c)(v) of VicForests’ Defence filed in the proceedings before the primary judge. Similarly to its position in MyEnvironment, VicForests argues that the primary judge was not in a position to identify any ‘threat’ with respect to the Scheduled Coupes since the extent to which VicForests will seek to log these coupes, by what means, and in what configuration, is uncertain. Further, even if it be accepted that Greater Gliders have been detected in the Scheduled Coupes, it is unclear whether any actual timber harvesting operations will constitute the necessary threat to satisfy one of the conditions precedent to the engagement of the precautionary principle.

200    In the further alternative, VicForests contends that, if the precautionary principle is engaged and the threat in the Scheduled Coupes is not negligible, VicForests will carefully evaluate management options in response to the threat such that it will comply with cl 2.2.2.2 of the Code in respect of the Scheduled Coupes. In other words, the threat posed by prospective forestry operations in the Scheduled Coupes will be addressed by adaptive management and the measures alleged to be required are not proportionate to the threat in issue.

201    VicForests argues that there is nothing in the formulation of the precautionary principle which requires decision-makers to give the ‘serious or irreversible damage’ factor overriding weight compared to other factors required to be considered, such as social and economic factors, when deciding how to proceed. Properly construed, the precautionary principle requires caution, but it does not mandate inaction, and it will not generally dictate one specific course of action to the exclusion of others. According to VicForests, it should not be used to avoid all risks.

202    VicForests also argues that the primary judge ought to have found, on the whole of the evidence and on the proper construction of the precautionary principle, that whatever may have been the historical position, the development and implementation of more adaptive silvicultural practices, together with more widespread, pre-harvest surveys, constitutes a sufficient degree of cautiousness in the circumstances such that, assuming the precautionary principle was engaged, it had not been breached.

203    FLP challenges this ground on the basis that it is a challenge to a finding of a future fact by the primary judge in circumstances where VicForests does not point to any specific error in the reasoning.

204    Our appellate function is confined to correcting error: see Branir Pty Ltd v Owston Nominees Pty Ltd (No 2) [2001] FCA 1833; (2001) 117 FCR 424 at [20]-[22]. To establish error, VicForests must persuade us that the primary judge’s factual findings were “glaringly improbable”, were contrary to “incontrovertible facts or uncontested testimony”, or were “contrary to compelling inferences”: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]-[29]; see also Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 at [2]-[10], [45]-[54] and [169] and Queensland v Masson [2020] HCA 28; (2020) 381 ALR 560 at [119]. VicForests has not come close to satisfying the requisite standard for appellate correction of any fact finding error by the primary judge. VicForests’ submissions do no more than argue for a different result based on the same evidence which the primary judge carefully evaluated with the benefit of a lengthy hearing, during which her Honour was able to form an impression of each witness as they gave evidence, and a view. Her Honour’s careful evaluation culminated in the Principal reasons containing 1464 closely considered paragraphs.