FEDERAL COURT OF AUSTRALIA

Friends of Leadbeater’s Possum Inc v VicForests [2018] FCA 178

SUMMARY

In accordance with the practice of the Federal Court in cases of public interest, importance or complexity, the following summary has been prepared to accompany the orders made today. This summary is intended to assist in understanding the outcome of this proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet at www.fedcourt.gov.au together with this summary.

1    This proceeding concerns forestry operations in the Central Highlands State Forest, in the north west of Victoria. The term “forestry operations” encompasses the felling of trees (or logging as it is usually called), but also includes conduct such as land clearing to prepare for logging, burning after logging and the re-planting of trees. The applicant is an organisation whose objects and purposes, and activities, are directed towards the protection and conservation of the environment. The federal legislation at the centre of this case, the Environment Protection and Biodiversity Conservation Act 1999 (Cth), expressly permits organisations such as the applicant to bring proceedings about alleged contraventions of that legislation. The respondent, VicForests, is the statutory agency in Victoria which carries out forestry operations in State forests.

2    In 1998, the State of Victoria and the Commonwealth entered into an intergovernmental agreement called the Central Highland Regional Forest Agreement. The purpose of that agreement, which is often abbreviated to “RFA”, was to establish a framework for the management of the forests of the Central Highlands. The Commonwealth entered into similar RFAs with Victoria in relation to other forest regions in Victoria, and also entered into similar RFAs with other State governments. Regional Forest Agreements 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 by the Commonwealth to determine that State forest management systems would provide adequate protection to the environment, including to the flora and fauna found in forests. These State systems included the areas a State sets aside as reserves to be protected from forestry operations, and the State’s forest management prescriptions regulating individual forestry operations. RFAs also dealt with other matters such as forest industry development, indigenous heritage and other forest uses.

3    After the Commonwealth and the States decided to pursue a national system of RFAs, the Commonwealth enacted legislation to exempt forestry operations in regions covered by RFAs from the operation of federal environmental legislation. The current legislation is the Environment Protection and Biodiversity Conservation Act 1999 (Cth), or EPBC Act for short. It contains a series of prohibitions on conduct that has, or is likely to have, a significant impact on a matter of national environmental significance. Listed threatened species is one such matter. Others include World Heritage areas and the marine environment. People wishing to engage in conduct that is likely to have such an effect generally have to go through an approvals process under the EPBC Act, and the federal Minister may or may not approve the conduct, and if approved, may impose conditions that have to be complied with to minimise or mitigate any adverse environmental effects. The EPBC Act contains a number of exemptions from this process. One, as I have noted, relates to the conduct of forestry operations.

4    The decision I am handing down today is about the nature and scope of the exemption for forestry operations, which is contained in s 38(1) of the EPBC Act.

5    It is agreed between the parties that the Central Highlands RFA region is home to, among other species of fauna, populations of Leadbeater's Possum and Greater Glider. They are both listed as threatened species under the EPBC Act. The Leadbeater’s Possum is now listed as “critically endangered”, which is the category coming before “extinct in the wild”. The Greater Glider is listed as “vulnerable”, which recognises a lesser level of threat to its sustainability in the wild than the threat to the Leadbeater’s Possum. The applicant alleges that VicForests’ past and future forestry operations in a number of specifically identified coupes in the Central Highlands State Forest have had, will have, or are likely to have, a significant impact on the two species. The applicant seeks orders restraining VicForests from undertaking any further forestry operations in the identified coupes, as well as mitigation orders under the EPBC Act, in relation to past forestry operations.

6    A trial of the whole of the applicants’ allegations would have been a long and complicated process. The parties responsibly agreed that, in order to minimise costs and resources, the Court could answer a single question of law about the nature and scope of the exemption in s 38(1). If the answer were unfavourable to the applicant’s arguments, that would be the end of the proceeding. If the answer were favourable to the applicant’s arguments, there would need to be a full trial about the alleged impacts on the two species from VicForests’ forestry operations, but the central legal issue about the EPBC Act’s application would have already been answered.

7    The agreed procedure is called the stating of a separate question. In substance, the separate question in this proceeding asks whether VicForests’ forestry operations have the benefit of the exemption in s 38(1) of the EPBC Act. The question also refers to another piece of the federal legislation, the Regional Forest Agreements Act 2002 (Cth), where an exemption in the same terms is set out. However in my opinion it is the EPBC Act exemption in s 38(1) that is the proper focus of the arguments.

8    The applicant’s argument is that Victoria and the Commonwealth agreed, in the terms of the Central Highlands RFA, that there would be five yearly reviews of the performance and operation of the Central Highlands RFA, and those reviews were not carried out in the time periods required under the RFA. The result, the applicant contends, is that the exemption in the EPBC Act does not apply, and VicForests’ forestry operations are subject to the general prohibitions and federal approvals processes in the EPBC Act. It is an agreed fact that the three five yearly reviews required by cl 36 of the Central Highlands RFA were not undertaken in the periods set out in the RFA. This failure, the applicant alleges, means VicForests’ forestry operations are not being undertaken “in accordance with” the Central Highlands RFA, which is the language used in the s 38(1) exemption.

9    The State of Victoria and the Commonwealth were both granted leave to intervene and make arguments in the proceeding. They put forward arguments different to those of the applicant, and different to those of VicForests.

The Court’s decision

10    I have decided the applicant’s arguments about the scope and operation of s 38(1) should not be accepted. I have also decided that VicForests’ arguments about s 38(1) should not be accepted. I have decided that the correct construction of the exemption in s 38(1) is that put forward by the Commonwealth, with which the State of Victoria largely agreed.

11    In my opinion, VicForests’ conduct of forestry operations in the Central Highlands RFA region is covered by the exemption in s 38(1), notwithstanding the failure of the State of Victoria to undertake the five yearly reviews in the period set out in cl 36 of the Central Highlands RFA. I have decided that some failures to perform obligations assumed under an RFA are not intended by the EPBC Act to affect the conduct of forestry operations, but are matters between the two governments. Clause 36 and the five yearly reviews is one such matter.

12    However, I have also rejected the arguments of VicForests that, so long as forestry operations are conducted in a region covered by an RFA and there is no express prohibition of those forestry operations in the RFA, the s 38(1) exemption applies. I consider this gives the exemption too broad an operation, and not one intended by the EPBC Act.

13    I have accepted the submissions of the Commonwealth, with which the State of Victoria largely agreed, that there is, in effect, a mid-way point. Forestry operations must be undertaken in conformity with the systems of forest management accredited by the Central Highlands RFA, which is largely a State based forest management system. The system includes reserves set aside from forestry operations, restrictions called “management prescriptions” applicable to specific forestry operations, and requirements in action plans and recovery plans for different listed threatened species about where and how forestry operations must be carried out to ensure the protection of those species, and their habitat. These kinds of restrictions must be observed for forestry operations to have the benefit of the exemption in s 38(1).

14    As the State of Victoria submitted, this case was not about any breaches of the requirements in Victoria’s forest management system in the Central Highlands State forest, so it is no part of the Court’s decision in this matter to examine whether or not VicForests’ forestry operations in the identified coupes have complied with those requirements.

15    An important consequence of the conclusion I have reached is that I consider the separate question, as stated, cannot be answered with a simple “yes”. Rather, a qualified answer must be given. The applicant's arguments have failed, but to give an unqualified “yes” answer to the separate question would be to find VicForests has the benefit of the s 38(1) exemption in circumstances that have not been considered by the Court.

16    For that reason, no final orders will be made today. The parties and interveners will have an opportunity to consider the Court’s reasons and make proposals about how the separate question should be answered to reflect those reasons, including the fact that the applicant’s arguments have failed. The parties and interveners will also be given an opportunity to make submissions about what, if any, costs orders the Court should make.

JUSTICE MORTIMER

2 March 2018