Federal Court of Australia

Friends of Nyah Vinifera Park Inc v Minister for Environment and Water [2026] FCA 584

ORDERS

THE COURT ORDERS THAT:

1.    The amended originating application dated 6 March 2025 is dismissed.

2.    Unless the parties reach agreement on the orders to be made as to the costs of the proceeding:

(a)    by 4.00 pm on 19 May 2026, each party is to file written submissions of no more than 5 pages together with any evidence upon which it wishes to rely on the issue of costs;

(b)    by 4.00 pm on 26 May 2026, each party is to file any written submissions in response of no more than 5 pages; and

(c)    the issue of costs is to be decided on the papers.

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

REASONS FOR JUDGMENT

HORAN J:

INTRODUCTION

1    The applicant, Friends of Nyah Vinifera Park Inc, seeks judicial review of a decision made on 28 March 2024 by a delegate of the Minister for Environment and Water to approve the taking of a controlled action by the Lower Murray Urban and Rural Water Corporation (the Proponent) pursuant to s 133(1) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). The controlled action is comprised in the Nyah Floodplain Restoration Project, which forms part of the Victorian Murray Floodplain Restoration Projects (VMFRP).

2    The construction phase of the Project will result in the destruction of areas of habitat critical to the survival of the Regent Parrot, which is a listed threatened species in the vulnerable category under the EPBC Act. Nevertheless, the action was approved by the delegate on the basis that it was likely to produce offsetting benefits arising from the delivery of environmental water to other areas of breeding habitat in the Nyah floodplain.

3    The applicant alleges that the approval decision was affected by legal error in relation to the identification of the impacts and benefits attributable to the Project.

(a)    First, the applicant contends that the environmental benefits under the Proponent’s offset strategy were highly uncertain, and that there was an accepted risk of incorrect or prolonged inundation events that would be adverse to suitable habitat for the Regent Parrot. The applicant alleges that, by relying on an inadequate offset to justify the destruction of critical habitat of the Regent Parrot, the delegate failed properly to consider the impacts of the Project and failed to consider the principles of ecologically sustainable development and the precautionary principle, or otherwise made a decision that was legally unreasonable.

(b)    Second, the applicant contends that the delegate failed to identify and consider the counterfactual in which different measures or alternative projects would need to be taken by the State of Victoria to achieve the environmental outcomes under the Basin Plan 2012 (Cth), which could deliver the same or similar benefits to those attributed by the delegate to the Project. The applicant alleges that this failure by the delegate to compare the situations with and without the controlled action being taken involved a failure properly to consider the impacts of the Project, the principles of ecologically sustainable development, and the precautionary principle, or was otherwise legally unreasonable.

4    For the reasons set out below, neither of these contentions is made out, and the applicant has not established any legal error affecting the approval decision. Accordingly, the application will be dismissed.

BACKGROUND

Water Act and Basin Plan

5    The legislative framework established by the Water Act 2007 (Cth) and the Basin Plan provides the broader context for the grounds on which the applicant challenges the approval decision.

6    The Water Act provides for the water resources of the Murray-Darling Basin to be managed by the Commonwealth in conjunction with the Basin States, including Victoria, who are parties to the Murray-Darling Basin Agreement (which is set out in Schedule 1 of the Water Act). The area comprising the Murray-Darling Basin is defined in s 18A of the Water Act, an indicative map of which is set out in Schedule 1A.

7    The statutory objects relevantly include the promotion of the use and management of the Basin water resources in a way that optimises economic, social and environmental outcomes, including by ensuring the return to environmentally sustainable levels of extraction for water resources that are overallocated or overused, and protecting, restoring and providing for the ecological values and ecosystem services of the Murray-Darling Basin: s 3(c), (d)(i) and (ii).

8    A description of the Basin water resources is contained in s 2.01 and Schedule 1 to the Basin Plan, which relevantly states:

The Murray-Darling Basin is defined by the catchment areas of the Murray and Darling rivers and their many tributaries. Comprising 23 main river valleys, the Basin extends over 1 million km2 of south-eastern Australia, covering three-quarters of New South Wales, more than half of Victoria, significant portions of Queensland and South Australia, and all of the Australian Capital Territory. The Basin includes more than 77,000 km of rivers, creeks and watercourses, and an estimated 30,000 wetlands (Crabb 1997).

9    The Basin Plan is prepared and adopted under Part 2 of the Water Act, and provides for the integrated management of the Basin water resources in a way that promotes the statutory objects: Water Act, s 20. The Basin Plan is a legislative instrument: Water Act, s 33(1)(a). Agencies of the Commonwealth (including the Murray-Darling Basin Authority), agencies of Basin States, infrastructure operators and water access rights holders are required to act consistently with the Basin Plan: Water Act, ss 34–35.

10    One of the objects of the Basin Plan is the establishment and enforcement of environmentally sustainable limits on the quantities of surface water and ground water that may be taken from the Basin water resources: Water Act, s 20(b). Among other things, the Basin Plan must be prepared having regard to the significant adverse impacts of the use of the Basin water resources on the conservation and sustainable use of biodiversity, and must promote sustainable use of the Basin water resources to protect and restore the ecosystems, natural habitats and species that are reliant on the Basin water resources and to conserve biodiversity: Water Act, s 21(2).

11    The Basin Plan is required to include an identification of the risks to the Basin water resources, the strategies to be adopted to manage or address those risks, the environmental outcomes to be achieved, and the long-term average sustainable diversion limits and temporary diversion limits: Water Act, s 22(1).

12    To that end, Chapter 4 of the Basin Plan deals with the identification and management of risks to Basin water resources, including the risks to the availability of Basin water resources that arise from insufficient water being available for the environment, water being of a quality unsuitable for use, and the poor health of water-dependent ecosystems: Basin Plan, s 4.02(1). Such risks are addressed by a range of strategies under the Basin Plan, including to implement key elements such as an environmental watering plan, a water quality and salinity management plan, water trading rules, and water resource planning: Basin Plan, s 4.03(3)(a).

13    Chapter 6 of the Basin Plan governs the taking of water, including by reference to long-term average sustainable diversion limits (SDLs) which “establish environmentally sustainable limits on the quantities of surface water and groundwater that can be taken for consumptive use from Basin water resources, having regard to social and economic impacts”: Basin Plan, s 5.05(1). The outcomes sought to be achieved by SDLs include “the restoration and protection of water-dependent ecosystems and ecosystem functions in the Murray-Darling Basin”, as well as providing “well-informed water recovery measures”, “greater certainty of access to Basin water resources”, and better adaptation by water access entitlement holders and communities to reduced quantities of available water: Basin Plan, s 5.05(2).

14    Under s 23A of the Water Act, the Authority may propose adjustments to the SDL for the Basin water resources as the result of an adjustment of the SDL for the water resources of a particular water resource plan area. The objective in relation to the SDL adjustment mechanism (SDLAM) is to adjust SDLs “in a way that increases environmental outcomes while maintaining or improving social and economic outcomes”, in order to produce “a healthy and working Murray-Darling Basin”: Basin Plan, ss 5.02(2), 5.06. Such adjustments may reflect the effects of measures that increase the supply of water (supply measures) or measures that increase the efficiency of water use (efficiency measures), as well as “new acquisitions of held environmental water that was previously used for consumptive purposes”: Basin Plan, ss 7.01(2)(a), (b), 7.03, 7.04, 7.09.

15    Chapter 7 of the Basin Plan prescribes a process for the Authority to be notified by the Basin Officials Committee of measures relevant to the adjustment of SDLs, and to determine the amounts of proposed adjustments resulting from the notified measures. The initial notifications of supply measures and efficiency measures took place in 2016 and 2017, and additional measures were to be notified on or before 30 June 2025, subject to amendment or withdrawal by 30 June 2026: Basin Plan, s 7.12.

16    Part 2AA of the Water Act deals with the Water for the Environment Special Account, in order to enhance the environmental outcomes that can be achieved by the Basin Plan by protecting and restoring the environmental assets of the Murray-Darling Basin and protecting biodiversity dependent on the Basin water resources, so as to give effect to relevant international agreements: Water Act, s 86AA(1). The ways in which environmental outcomes can be enhanced include providing opportunities for environmental watering of floodplains in the River Murray System to (among other things) improve the health of forests and the habitats of fish and birds: Water Act, s 86AA(2)(f), (g), (h). This may be achieved by easing or removing constraints on the capacity to deliver environmental water to the environmental assets of the Murray-Darling Basin, so as to increase the volume of the Basin water resources that is available for environmental use: Water Act, s 86AA(2)(h), (3). Under the Basin Plan, the Authority is required to prepare a constraints management strategy, as well as a roadmap to assist the Commonwealth and Basin States to identify measures to relax constraints: Basin Plan, ss 7.08–7.08A. In this context, a “constraint measure” is defined by s 7.02(1) of the Basin Plan as “a measure that removes or eases a physical or other constraint on the capacity to deliver environmental water to the environmental assets of the Murray-Darling Basin”.

17    The Basin Plan contemplated that enhanced environmental outcomes would be pursued under the Commonwealth’s program to increase the volume of water resources available for environmental use by an additional 450 GL per year: Basin Plan, s 7.09(e), Sch 5. These outcomes relevantly included (Sch 5, cl (2)(f)):

in conjunction with removing or easing constraints, providing opportunities for environmental watering of an additional 35,000 ha of floodplain in South Australia, New South Wales and Victoria, improving the health of forests and fish and bird habitat, improving the connection to the river, and replenishing groundwater;

18    In December 2023, amendments were made to the Water Act to increase the environmental water recovery target under the Basin Plan by 450 GL, from 2,750 GL to 3,200 GL, and to remove a cap on the purchase of surface water entitlements (i.e. water buy-backs): Water Amendment (Restoring Our Rivers) Act 2023 (Cth). Accordingly, s 85AC of the Water Act now provides:

Division 4B—Increasing water for environmental use by 450 gigalitres

85AC Minister must increase water for environmental use

The Minister must take all reasonable steps to increase the volume of the Basin water resources that is available for environmental use by 450 gigalitres per year before the end of 31 December 2027.

Note 1:    This obligation does not detract from the Commonwealth’s ability to achieve any surface water recovery targets that it has set for itself.

Note 2:    The Basin Plan refers to the addition of 450 gigalitres per year of environmental water above the 2750 gigalitre benchmark conditions of development (see paragraph 7.09(e) of the Basin Plan).

Note 3:    The Minister can increase the volume of water available for environmental use, for example, by entering into arrangements on behalf of the Commonwealth to purchase water access rights (see section 86AF).

19    In the present context, the decision to approve the Project was made by the delegate under the EPBC Act. It was not a decision made under the legislative framework established by the Water Act or the Basin Plan. As discussed below, the principal relevance of that framework in the present context can be distilled to two propositions which are significant to the applicant’s submissions in support of the grounds of review:

(a)    First, the applicant contends that the implementation of the Basin Plan requires the return of significant volumes of environmental water to the Murray-Darling Basin. Accordingly, if the Project is not carried out, Victoria would be required to take other measures to fulfil its obligations under the Water Act and the Basin Plan, and those measures might produce the same or similar benefits. The applicant submits that, when considering the relevant impacts of the Project, the delegate failed properly to consider the counterfactual of a future in which the Basin Plan is implemented without the Project.

(b)    Second, the applicant contends that the offset strategy that was prepared and submitted by the Proponent (EPBC Act Offset Strategy for Regent Parrot at Nyah: Nyah Floodplain Restoration Project, dated 15 December 2023) did not take into account the legislative amendments to increase the water recovery target under the Basin Plan. Accordingly, in so far as the delegate considered the counterfactuals set out in the Offset Strategy, any assessment therein of a future in which the Basin Plan is implemented without the Project was based on incorrect assumptions that were inconsistent with the applicable legal framework at the time of the approval decision.

Referral of the Project

20    On 2 June 2020, the Proponent referred the Project to the Minister under s 68 of the EPBC Act for a decision as to whether or not it was a controlled action (the Referral).

21    In broad terms, the Project involves the construction and operation of water regulating structures in order to facilitate the managed inundation of parts of the Nyah floodplain, which is located to the west of the Murray River in the Nyah-Vinifera Park, north of Swan Hill, Victoria.

22    As described in the Referral, the Project is one of nine separate environmental works projects being undertaken as part of the VMFRP, the object of which is “to return a more natural inundation regime across more than 14,000 ha of high ecological value Murray River floodplain in Victoria through the construction of new infrastructure and modification of existing infrastructure”.

23    In providing a description of the proposed action, the Referral relevantly stated:

The Nyah Floodplain Restoration Project aims to restore a more natural inundation regime across 488 ha of high ecological value Murray River floodplain within the Nyah Vinifera Park. The proposed works would flood over half of the forest and provide inundation-dependant habitat with a water level of 63.2 m AHD, replicating the flood extent of the Murray River of up to 25,000 ML/day (Mallee CMA, 2014).

The project aims to mimic the impact of natural flood events by providing inflows from the Murray River and additional pumping when required. Analysis of the inundation flow equivalences (Jacobs, 2017) shows that the proposed works would allow management of inundation flows replicating up to 25,000 ML/d within the project area.

The project involves the construction of five regulators (N1a, N1b, N2, N5, N7), a series of containment banks, block banks, spillways and hardstand to facilitate managed inundation of the Nyah floodplain (refer Attachment 1 – Location of the project). The proposed works would facilitate an inundation of 488 ha of water, including River Red Gum and Black Box forests and woodlands. The project also involves the decommissioning of a number of redundant structures in the Parnee Malloo Creek to allow a more natural and unhindered flow to the creek.

24    The construction footprint of the Project, comprising the infrastructure and the land required for its construction, at that time occupied an area of approximately 7.8 hectares. The construction would require the removal of approximately 7.42 hectares of native vegetation.

25    The Referral identified the Regent Parrot as a listed threatened species within the construction footprint and the inundation area. It was stated that impacts on the species had been assessed as unlikely “as the species are wide ranging, loss of vegetation habitat (approximately 7.42 ha) is relatively small in comparison to the 913 ha of the Nyah Park floodplain, and suitable surrounding habitat is widespread”. After stating that disturbance to known nesting colonies was unlikely, the Referral continued:

In addition, the [National Recovery Plan for the Regent Parrot] recognises the importance of environmental watering in supporting River Red Gum habitat and breeding sites for Regent Parrot. The VMFRP aims to maintain and enhance the condition of River Red Gum habitats and broader floodplain and wetland habitats which are likely to assist with the recovery of the Regent Parrot.

26    In describing the hydrology relevant to the Project area, the Referral relevantly stated:

The natural pre-regulation hydrology of the Murray River was characterised by frequent inundation at Nyah between 12,500 and 22,500 ML/d (Mallee CMA, 2014). Flooding persisted for four to eight months in most years and frequently lasted throughout the year.

…

Key changes to the Murray River flow (at Swan Hill) under current (regulated conditions) has impacted the hydrology of the Nyah floodplain, these changes in flow include:

- Median daily discharge (ML/d) has declined under current conditions, with the greatest impacts being in the high flow months from June to January (Ecological Associates, 2016).

- The frequency of flow peaks greater than 10,000 ML/d has declined somewhat but the median duration of these events has declined even more.

- Flows of 10,000 to 15,000 ML/d, which would have occurred almost 15 times every 10 years under natural conditions, last only 5 weeks rather than the 5 month median duration under natural conditions and

- The duration of events which reach the upper extent of red gum forest communities (25,000 ML/d) has almost halved from 75 days to 30. The frequency of these events has also declined significantly from 10 events every 10 years to only 6 (Gippel, 2014).

27    The Ecological Vegetation Classes (or “EVCs”) in the inundation area of the Project primarily comprise “swampy or wetland vegetation communities that require or are tolerant of inundation and therefore are likely to positively respond to the proposed inundation”. The Referral noted that “[t]he hydrological regime experienced by each of these vegetation communities has been compromised due to river regulation and diversions”.

28    The Referral addressed the current condition of the environment in the Project area, including the modified floodplain hydrology since the mid-1930s as evidenced in flood modelling. The Referral stated:

Ecological condition

The forests and woodlands of the Murray River floodplain have been declining rapidly in condition over the past two decades. The decline is associated with increasing regulation of the Murray River and extended periods of drought (Cunningham et al, 2011).

Reductions in flooding duration within the Nyah-Vinifera Park has resulted in a decrease in tree density and canopy cover, and a loss of seasonal wetland habitat. Flood duration is too short to support aquatic marshland vegetation and the understorey is now dominated by grasses and seasonal floodplain herbs, with river red gums establishing on the former wetland beds (Ecological Associates, 2014). The decline in wetland habitat means the floodplain now only provides opportunistic habitat for aquatic fauna that recolonise the system when water is available, and the encroachment by trees excludes many waterbirds that rely on open water (Ecological Associates, 2014).

Flood durations are also too low to sustain perennial aquatic macrophytes and more drought-tolerant species are now more abundant. Flood duration in the Parnee Malloo Creek is also too brief to meet the habitat requirements of channel specialist fish species and Murray crayfish (Ecological Associates, 2014).

The Nyah floodplain features broad wetland depressions that retain water to a depth of one metre or more following flood recession. These areas require frequent and persistent inundation to sustain their rich ecological values.

Controlled action decision

29    On 26 June 2020, a delegate of the Minister decided under s 75 of the EPBC Act that the Project was a controlled action, and identified ss 18 and 18A (listed threatened species and communities) as the controlling provisions.

30    On 20 July 2020, a delegate of the Minister made a decision under s 87 of the EPBC Act that the Project would be assessed by an accredited assessment process through an Environment Report under the Environment Effects Act 1978 (Vic) (EE Act).

31    On 18 November 2022, after receiving a request from the Proponent, a delegate of the Minister accepted a variation of the proposed action under s 156B of the EPBC Act. The varied proposal was substantially the same as that described in the Referral, with some refinements to the project area in the light of additional information and assessments. Among other things, the construction footprint was increased to approximately 10.16 hectares, resulting in the loss of up to 14.1 hectares of native vegetation. The maximum inundation area was reduced slightly to 475 hectares. There was no material change in the predicted impacts of the varied proposal for the Regent Parrot.

Assessment processes

Standing Inquiry and Advisory Committee Report (July 2023)

32    The Minister for Planning for Victoria (the Victorian Minister) appointed the VMFRP Standing Inquiry and Advisory Committee (SIAC) as an inquiry pursuant to s 9(1) of the EE Act and an advisory committee pursuant to s 151(1) of the Planning and Environment Act 1987 (Vic).

33    On 5 July 2023, SIAC published the “Victorian Murray Floodplain Restoration Project: Standing Inquiry and Advisory Committee Report No 2 – ER Central – Nyah and Vinifera Floodplain Restoration Projects” (SIAC report).

34    In the Executive Summary, the SIAC referred to the Project as one of several projects forming part of the VMFRP which

essentially allow for the construction of infrastructure to:

•    allow for longer retention of natural floods on the floodplain

•    provide for the pumped inundation of the floodplains at times when there is not sufficient flow for natural floods.

The overall objective is to try and inundate the Project area floodplains on a more natural cycle, a cycle that has been disturbed by human intervention since settlement, primarily by diversions and extraction.

35    The SIAC considered submissions raising a range of concerns and issues (including a submission from the applicant) and held a roundtable in Swan Hill in April 2023. Its conclusion was summarised as follows:

Overall, the Committee concludes that the Project should have a net community benefit with positive ecological impacts due to the increased flooding of the Project areas and should proceed, but implementation, management and monitoring will need to be undertaken carefully and thoroughly to ensure risk is minimised.

36    The SIAC addressed the terrestrial ecology effects and impacts on biodiversity, including the extent of proposed vegetation removal associated with the construction of the Project “and the consequential adverse impacts on biodiversity and habitat, through the loss of large and very large trees and hollow-bearing trees for hollow dependent species”. The impact on rare and threatened species, including the Regent Parrot, was identified in submissions, including concerns in relation to the lack of a native vegetation offset strategy.

37    For present purposes, it is unnecessary to consider in detail the findings and recommendations set out in the SIAC report, other than to note that it was included as an attachment to the brief provided to the delegate in relation to the approval decision under s 133 of the EPBC Act.

Victorian Minister’s report

38    On 28 October 2023, the Victorian Minister provided an assessment report entitled Vinifera and Nyah Floodplain Restoration Projects: Minister’s Assessment under Environment Effects Act 1978 (Victorian Minister’s report).

39    In the Executive Summary, the Victorian Minister relevantly stated:

It is my overall assessment that while both the Vinifera and Nyah projects will give rise to significant adverse environmental effects during construction, they can proceed with acceptable effects, and can achieve an overall improvement to biodiversity in the long term within these floodplains. The acceptability of adverse effects is subject to the completion of some specific, further detailed analysis, as well as the implementation of an environmental management regime consistent with that endorsed by the SIAC and refined through the findings and recommendations of this assessment.

Consistent with the findings of the SIAC, I consider that both the Vinifera and Nyah projects are likely to result in long term improvement to biodiversity values of the floodplains. However, along with the SIAC, I recommend additional analysis to provide greater certainty on the effects of managed inundation on floodplain vegetation communities as well as soil erosion risks, to inform the detailed design and operational parameters. I have also recommended further analysis to inform an update to the assessment of overall improvement to biodiversity for each project. The outcomes of this further analysis (along with other recommendations of this assessment) will need to be considered in relevant project approval decisions and secondary consent matters.

While both of the projects can achieve overall benefits to biodiversity values during operations, the construction and operation of the projects will require careful management to ensure appropriate minimisation of adverse impacts, particularly with respect to ecological values, Aboriginal cultural heritage values and surface water management. The loss of native vegetation proposed within the construction footprints remains a significant impact for both of the projects. However, I consider that the proposed environmental delivery standards (EDSs), including amendments recommended by the SIAC and this assessment, will provide appropriate measures to ensure that the adverse effects of both construction and operations are further minimised and managed to acceptable levels. This also takes account of the predicted benefits for these same biodiversity values in the floodplain environments that will experience improved environmental watering.

…

It is my assessment that residual impacts on EPBC Act-listed species and communities of both the Vinifera and Nyah projects are unlikely to be significant with the implementation of the proposed EDSs, except for likely significant impacts on the Regent Parrot. I support amendments to EDSs and monitoring requirements as recommended by the SIAC and further strengthened by my assessment, to ensure appropriate avoidance and minimisation of adverse impacts on [matters of national environmental significance (MNES)] as detailed in Appendix A. There is potential for cumulative impacts on MNES from the Vinifera and Nyah projects in conjunction with other VMFRP projects (assuming they proceed), in particular cumulative habitat loss for Regent Parrot from vegetation clearance during construction. However, there are also expected to be long term benefits for MNES from operations, including for the Regent Parrot, through improved ecosystem health in areas of the floodplains that provide habitat. It is my finding that the residual impact on Regent Parrot can be acceptably managed with the adoption of recommendations set out within this assessment.

40    The Victorian Minister concluded that the potential adverse effects of construction on the Regent Parrot were likely to be significant due to direct impacts on potential breeding and foraging habitat (namely, the removal of 14 ha of potential foraging habitat and up to 6 ha of potential breeding habitat, and impacts to 13 potential breeding trees). The Victorian Minister accepted that the population of Regent Parrot at Vinifera and Nyah was considered an “important population”, and that all potential habitat within the Project areas was considered critical to the survival of the species. Accordingly, the Victorian Minister considered that the proposed habitat loss due to vegetation clearance was likely to result in a significant impact to the species. The Victorian Minister recommended the implementation of measures to avoid and minimise the impacts on the Regent Parrot, and noted that “[a]ny habitat that cannot be avoided must be offset in accordance with state and federal offset requirements, where relevant”. The Victorian Minister considered that the risks and potential impacts on the Regent Parrot could be “acceptably managed”.

41    The Victorian Minister’s report also addressed the hydraulic effects on floodplain vegetation, and the assessment of overall improvements to biodiversity. The Victorian Minister accepted that the predicted ecological and biodiversity benefits of the Project were likely to occur, although they would take some time to realise, and supported the SIAC’s recommendation for additional hydraulic modelling and analysis. The Victorian Minister did not support the SIAC’s recommendation that a decision on ecological offsets could be deferred until an evaluation of the actual environmental benefits achieved from the operational phase of the Project, noting that the policy approach in Victoria was to require offsets to be identified prior to commencing vegetation removal.

42    As mentioned above, the Victorian Minister’s report constituted the accredited assessment process for the purposes of Part 8 of the EPBC Act. In setting out her conclusions, the Victorian Minister stated:

In conclusion, it is my assessment that while both the Vinifera and Nyah projects will give rise to significant adverse environmental effects during construction, they can proceed with acceptable effects, and can achieve an overall improvement to biodiversity in the long term within these floodplains. The acceptability of adverse effects is subject, however, to the completion of further detailed analysis as discussed in this assessment, as well as the implementation of an environmental management regime consistent with that endorsed by the SIAC and refined through the findings and recommendations of this assessment.

I am satisfied that the environmental effects of the projects have been sufficiently identified and considered. I am also satisfied in principle that the proposed PSA and incorporated document, with changes addressed in accordance with this assessment, can establish an appropriate mechanism to facilitate planning controls for the construction and operation of the projects. I also note that formal decision-making on the PSA and EMF still needs to occur in light of this assessment.

My assessment concludes the accredited state assessment for each of the projects for the purposes of the EPBC Act and will inform the Commonwealth Government Minister for Environment and Water’s decisions about whether and under what conditions to approve the projects under the EPBC Act. It is my assessment that residual impacts on EPBC Act listed species and communities of both the Vinifera and Nyah projects are unlikely to be significant with the implementation of the proposed EDSs, except for likely significant impacts on the Regent Parrot. I support amendments to EDSs as recommended by the SIAC and further strengthened by my assessment, to ensure appropriate avoidance and minimisation of adverse impacts on MNES as detailed in Appendix A. There is potential for cumulative impacts on MNES from the Vinifera and Nyah projects in conjunction with other VMFRP projects (assuming they proceed), in particular cumulative habitat loss for Regent Parrot from vegetation clearance during construction. However, there are also expected to be long term benefits for MNES from operations, including for the Regent Parrot, through improved ecosystem health in areas of the floodplains that provide habitat. It is my finding that the residual impact on Regent Parrot can be acceptably managed with the adoption of recommendations set out within this assessment.

Approval decision

43    On 28 March 2024, a delegate of the Minister made a decision to approve the controlled action under s 133(1), subject to specified conditions that were attached to the approval under s 134 of the EPBC Act.

44    Relevantly to the present proceeding, the conditions included the following requirements in relation to the preparation and approval of an Offset Management Plan for the Regent Parrot:

OFFSET MANAGEMENT PLAN FOR REGENT PARROT

32)     To compensate for the residual significant impacts of the Action on the Regent Parrot the approval holder must, before commencement of the Action, submit to the department an Offset Management Plan for approval by the Minister. The approval holder must not commence the Action unless the Offset Management Plan has been approved in writing by the Minister. The approval holder must commence implementing the approved Offset Management Plan by the commencement of the Action and continue to implement the approved Offset Management Plan at least until the expiry of this approval.

33)     The OMP must include:

a)     be prepared by a suitably qualified expert and before the commencement of the action.

b)     be prepared in accordance with the EPBC Act Environmental Offsets Policy and the Environmental Management Plan Guidelines.

c)     reference the EPBC Act approval conditions to which the OMP refers.

d)     detail the residual harm to protected matters which the OMP will compensate for.

e)     demonstrate how the OMP will fully compensate for the residual harm on protected matters.

f)     commit to achievable ecological outcomes for the Regent Parrot and the offset area, and timeframes for their achievement.

g)     include a table of commitments made in the OMP to achieve the environmental objectives, and a reference to exactly where these commitments are detailed in the OMP. These commitments should include as a minimum:

i.     maintaining a productive potential breeding area

ii.     maintaining and/or restoring active flyways

iii.     decreasing competition for hollows in areas that have had hollow bearing trees removed

iv.     the on-going protection of known nesting trees

v.     improvement of River Red Gums and their associated [Ecological Vegetation Classes (EVCs)] in the offset area

h)     detail the spatial extent as a shapefile of the offset area to which the plan relates and the governance structure of the offset.

i)     detail specific, measurable and timebound management measures to achieve the ecological outcomes.

j)     include a schedule of reporting and review mechanisms to demonstrate compliance with the commitments made in the OMP.

k)     include an assessment of risks relating to achieving the ecological outcomes and risk management strategies and/or mitigation measures that will be applied to address identified risks.

l)     detail a monitoring program, including:

i.     measurable performance indicators to monitor attainment of the ecological outcomes.

ii.     measurable condition indicators to monitor attainment of the ecological outcomes.

iii.     baseline data of the general condition of the offset area and the performance indicators that will enable demonstratable achievement of the ecological outcomes

iv.     trigger values for corrective measures.

v.     the timing and frequency of monitoring, ensuring monitoring is capable of detecting trigger values and changes in the performance indicators.

vi.     proposed corrective and mitigation measures which will be undertaken, and the timing of those measures, if trigger values are reached.

m)     include links to other relevant plans or conditions of approval, including state approval conditions.

34)     The approval holder must implement the OMP as approved by the Minister in writing until the expiry date of this approval.

(Emphasis in original used to indicate defined terms.)

45    Other conditions placed restrictions on clearing or construction activities during the nesting and breeding season for various species, including the Regent Parrot, requiring surveys to be undertaken by a suitably qualified field ecologist.

Approval brief

46    In March 2024, for the purposes of deciding whether to approve the Project under Part 9 of the EPBC Act, the delegate was provided with an “Approval decision brief (assessment report)” (the Approval Brief). Against the recommendations set out on the first page of the Approval Brief, the delegate relevantly indicated that she had:

(a)    considered the information in the Approval Brief and its attachments, including an earlier proposed approval decision package which included the Victorian Minister’s report;

(b)    considered the responses to an invitation to comment on the proposed decision to approve the Project;

(c)    approved the Project for each controlling provision, and agreed to attach conditions of approval set out in an attachment; and

(d)    accepted the reasoning in the Departmental briefing package as the reasons for her decision.

47    The Approval Brief stated that the Department considered that the proposed action was unlikely to have an unacceptable impact on listed threatened species and communities if it were undertaken in accordance with the recommended conditions of approval.

48    In addressing the comments provided on the proposed approval decision, the Approval Brief stated:

11) The department has considered the need for conditions for all species including those that are known to occur or have the potential to occur. The main species the proponent has queried are the Regent Parrot (Polytelis anthopeplus monarchoides) and Winged Peppercress (Lepidium monoplocoides). These species have been considered in the context of the larger action and the cumulative impacts to the species and the department considers that the conditions are reasonable and necessary.

12) The proponent has provided comments that an offset management plan is not required for the Regent Parrot. The department has undertaken discussions with the proponent regarding the offset requirements for the larger action. The proponent submitted an offset proposal for this project, that department deemed adequate for the purposes of making the approval decision. The offset proposal must be formalised into an offset management plan for the residual significant impacts from this individual project and from the larger action.

49    The attachments to the Approval Brief included an earlier “Proposed approval decision brief (assessment report)” (Proposed Approval Brief) that was signed by the delegate on 1 March 2024. On the front page of the Proposed Approval Brief, the delegate indicated that she had:

(a)    considered the information in the brief and attachments, including the SIAC report and the Victorian Minister’s report, and a “Legal considerations report” that was prepared by the Department;

(b)    agreed that the recommendation decision to approve the proposed action reflected the delegate’s proposed decision;

(c)    agreed to the proposed conditions of approval set out in an attachment; and

(d)    signed letters to the proponent and relevant Ministers inviting comment on the proposed decision.

50    When signing the Proposed Approval Brief, the delegate included the following comments:

Thank you for the comprehensive assessment package and draft conditions to manage impacts – I agree the recommendations for the Nyah Floodplain Restoration Project, Victoria.

51    The key issues set out in the Proposed Approval Brief relevantly included:

3)    The department considers the proposed larger action to have or likely to have a cumulative significant residual impact on the Regent Parrot (Polytelis anthopeplus monarchoides), Murray cod (Maccullochella peelii peelii) and Silver perch (Bidyanus bidyanus). The department has considered these cumulative impacts when recommending the conditions of approval at Attachment C.

4)     The department considers the individual proposed action is unlikely to have an unacceptable impact on listed threatened species and communities if it is undertaken in accordance with the recommended conditions of approval at Attachment C.

52    The Proposed Approval Brief proceeded to outline the background to the Project, the EPBC Act process, the impacts of the Project, and the Department’s recommendations. Among other things, the Department was satisfied that the assessment undertaken by Victoria was adequate, and agreed with the majority of the conclusions and recommendations of that assessment, including:

a)     The department agrees with the states assessment that impacts to Regent Parrot would have residual significant impacts on the species and require an offset. The cumulative impact of the larger action will have a residual significant impact on the Regent Parrot, particularly on potential breeding habitat.

b)     The department considers that offsets for the Regent Parrot can be addressed on a project by project basis and therefore the department has requested an offset proposal for the impact to 6 ha of potential breeding habitat. The proponent submitted an Offset Proposal (Attachment E2) that the department considers adequately demonstrates that an on-site offset is suitable.

53    The Department recommended “that the approval remain valid for a period of 25 years to ensure that the offsets are managed in such a manner as to provide compensation for the residual impacts from the proposed action”. The Department considered that “impacts from the construction should be adequately offset after 25 years and compliance of the operational component of the project will be adequately managed under state and [Murray-Darling Basin Authority] obligations after the 25 year period”.

54    The Proposed Approval Brief attached a “Legal considerations report: Considerations relating to decision-making under Part 9 of the EPBC Act” (Legal Considerations Report), which recommended that the Project should be approved subject to specified conditions. In this regard, the Proposed Approval Brief relevantly stated:

27)     The attached legal considerations report identifies:

a)     The matters which you must and may consider in making your proposed decision on whether or not to approve the proposed action, including the likely impacts of the proposed action for the purpose of each controlling provision, principles of ecologically sustainable development, economic and social matters, and matters relevant to listed threatened species and communities, and

b)     The department’s analysis and conclusions in respect of these matters and the recommended proposed decision.

Statement of Reasons

55    By letter dated 26 April 2024, the applicant’s legal representatives requested a statement of reasons for the approval decision under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). The delegate provided a Statement of Reasons dated 5 September 2024.

56    At paragraph 20 of the Reasons, the delegate set out the evidence or other material on which her findings were based. The delegate stated that she had considered the Approval Brief and its attachments, which relevantly included the Proposed Approval Brief, the Legal Considerations Report, and the Proponent’s Regent Parrot offset proposal.

57    To a significant extent, the Reasons reflect the contents of the Legal Considerations Report, and they appear to have been prepared largely on the basis of that document as a contemporary reflection of the delegate’s reasons for decision.

58    The delegate noted that the proposed action has two main phases: the construction phase, which will impact 14.12 hectares of native vegetation and 145 large trees, and the operational phase. The Project is part of a larger action, namely the VMFRP, which is part of the Authority’s SDLAM projects under the Basin Plan.

59    The delegate referred to the conclusion in the Victorian Minister’s report in relation to the impact on the Regent Parrot, namely:

Residual significant impacts from the construction of the action and the direct removal of vegetation for the Regent Parrot (Polytelis anthopeplus monarchoides) would have residual significant impacts and the State recommended an offset under EPBC Act for this species.

60    The delegate relevantly stated that the Regent Parrot is “a highly mobile species that typically nests in hollows of River Red Gum (Eucalyptus camaldulensis) within 120 m of water during August to February”, and that “[p]referred hollows are in very large River Red Gums and can take a minimum of 160 years to become suitable”. The species does not reside within the breeding area outside of the breeding season.

61    The delegate noted the Victorian Minister’s report had “identified the removal of 14 ha of potential foraging habitat, that includes 6 ha of potential breeding habitat and impacts to 13 trees identified as potential breeding trees”. The Victorian Minister’s report had stated that the Regent Parrot was “known and considered present” in the Project area, although there were no records of breeding within that area. The report noted that there was insufficient information to rule out the possibility that the potential breeding habitat in the Project area could be used by the species in the future. The delegate accepted that “the south-eastern range of the species is important for the future movement of the species and that the time required for suitable preferred hollows to form, being 160 years, means that the habitat in the proposed action area is habitat critical to the survival of the species”.

62    The delegate noted that the Victorian Minister’s report recommended an offset for the Regent Parrot for all impacted areas, including potential foraging and potential breeding habitat.

63    The delegate considered the Recovery Plan for the Regent Parrot, which identified key habitats that are critical to the survival of the species, including “[b]reeding and nesting habitat, typically within 120 m of rivers”. The delegate found:

40)    I accepted that the department agreed with the finding in the [Victorian] Minister’s report, that there would be a residual significant impact from this project and the larger VMFRP action on breeding habitat for the Regent Parrot and I noted that an offset proposal has been provided by the proponent.

64    The delegate proceeded to consider the impacts of the Project on the Regent Parrot, as follows:

41)    I considered that the main impacts to the Regent Parrot identified in the [Victorian] Minister’s report were direct impacts during the construction phase to populations that may lead to mortality and disturbance through vegetation clearing and noise.

42)    The vegetation clearing could: reduce the availability of hollow bearing trees, reduce foraging, perching and roosting habitat, and lead to habitat fragmentation.

43)    I acknowledged that the mid-Murray River population of the Regent Parrot is considered an important population. The proponent disagreed and suggested that each individual proposed action area of the larger VMFRP action contained its own individual population. I noted that the [Victorian] Minister’s report disagreed with the proponent and stated that the mid-Murray population was considered one population in the recovery plan.

65    After briefly dealing with avoidance and mitigation measures, the delegate addressed proposed offsets, stating:

Proposed offsets

45)    I noted that an offset strategy for the Regent Parrot was submitted by the proponent.

46)    I acknowledged that the potential breeding habitat was identified through associated ecological vegetation classes (EVCs) by the proponent and include: EVC106, 295, 814, 815 and 816. Within the disturbance area, 6 ha of impact to potential breeding habitat are comprised of these EVCs.

47)    The proposed action area contains 191 ha of potential breeding habitat that can be used as an on-site offset. That is, they are areas within the associated EVCs for potential breeding habitat and are located within 120 m of major waterways.

48)    I noted that the proponent has proposed an on-site offset area:

•    a total 43 ha area of foraging and breeding habitat for the Regent Parrot.

•    that includes a 28 ha area of potential breeding habitat

49)    The broad objectives of the proposed site management would be to maintain the current intactness of the EVCs associated with Regent Parrot breeding habitat within the proposed action area that would benefit from the managed watering events that are part of the proposed action. The benefit would be assessed by improved forest and woodland stand condition, the prevention of negative changes to this habitat and the existing populations of Regent Parrot, that may be caused by habitat degradation.

50)    I noted that the offsets would be achieved by:

a)    Changed hydrology on the floodplain.

b)     Improved inundation patterns required to support hollow bearing tree species.

51)    I acknowledged that the outcome broadly described above would be met by the approval holder undertaking the action and would be regularly monitored. The department reviewed a proposed strategy and was satisfied that it demonstrated the adequacy of an on-site offset for the Regent Parrot, and I accepted the department’s advice and was satisfied of the same matter.

66    The delegate then discussed the conditions proposed by the Department to limit the impact on the Regent Parrot during construction, by limiting direct mortality and the indirect impact of noise and disturbance during the breeding and nesting season. The delegate continued:

56)     I noted that the potential benefit of hydrological flows onto the floodplain could lead to an improvement in condition of suitable habitat for the species. However, incorrect, or prolonged inundation events could lead to tree dieback and a decline in suitable habitat or very large hollow bearing trees for the species. The proposed conditions included that stags must remain in situ, as this will reduce competition for hollows and may enable suitable hollows for Regent Parrot to form as the stags age (see condition 3).

57)     Condition 32 requires the submission of an Offset Management Plan for the Regent Parrot with requirements outlined in condition 33.

67    In conclusion, the delegate agreed with the Victorian Minister’s report that “the above impact pathways would have residual significant impacts on Regent Parrot for this proposed action”. After referring to the cumulative impacts across the larger action comprising the VMFRP, the delegate stated:

60)     While consideration should be given to the cumulative impacts, I agreed with the department’s recommendation that the possible impacts to Regent Parrot would be limited to the loss of breeding habitat and to breeding disturbance during the construction phase of the proposed action.

61)     I therefore considered that approving this action with the proposed conditions and offset strategy would reduce the level of impact to the species and adequately compensate for the construction impacts to the Regent Parrot.

68    The delegate made findings on an assessment of impacts on several other species of fauna, before setting out a conclusion:

Conclusion for listed threatened species and ecological communities

128)     I noted that the [Victorian] Minister’s report concluded that the residual impacts to threatened species and communities were unlikely to be significant, except for the Regent Parrot. I further noted that the [Victorian] Minister’s report identified the action as being likely to require an offset under the EPBC Act and I agreed.

129)     I noted that the [Victorian] Minister’s report concluded that residual impacts on EPBC Act-listed species and communities could be acceptably managed provided that the recommended management and mitigation measures were implemented.

130)     I agreed with the conclusion in the [Victorian] Minister’s report, with which the department also agreed, and accepted the conditions which the department recommended to avoid, manage and mitigate residual impacts to threatened species and communities.

69    Under the heading “Environmental benefits”, the delegate recognised (at paragraph 131) the potential benefits to the environment that were outlined in the Victorian Minister’s report and associated documentation, and found that a decision to approve the Project with conditions may provide environmental benefits that meet the objective of the EPBC Act. This included providing for the long-term protection of the environment by returning more natural flows to the floodplain areas, promoting ecologically sustainable development “through the conservation and ecologically sustainable use of natural water resources in the Murray Darling Basin and the support of initiatives developed under the Murray-Darling Basin Plan”.

70    The delegate noted (at paragraph 132) “that alternatives to the proposed action were not considered in the assessment process”, but that “[t]he projects that formed the larger VMFRP action were developed under the Murray-Darling Basin Plan and were the proposals accepted by that agency under the SDLAM”. The delegate agreed with the determination in the SIAC report that “alternatives to the SDLAM projects (being the proposed action) were outside the scope of the assessment under the [EE Act]”. Accordingly, the delegate “agreed with the SIAC report and [Victorian] Minister’s report that project alternatives were outside the scope of the assessment”.

71    While acknowledging the “reasonable expectation for overall biodiversity improvement and benefit in the long term from the proposed action”, the delegate noted the limitations of the information presented in the Environmental Report documentation, and the recommendation that “further analyses should be undertaken to understand the response of vegetation communities across the inundation area”. The delegate otherwise “agreed with the proponent and the [Victorian] Minister’s report that the intent of the proposed action is to improve the ecology of the floodplain environments and to improve ecological function of floodplains”.

72    The delegate addressed economic and social matters for the purposes of s 136(1)(b) of the EPBC Act, including Aboriginal cultural heritage.

73    In considering the principles of ecologically sustainable development, including the precautionary principle, for the purposes of ss 136(2)(a) and 391(2) of the EPBC Act, the delegate relevantly stated:

155)     In making my decision, I have taken into account the principles of ecologically sustainable development. In particular:

a)     The approval decision brief from the department, the [Victorian] Minister’s report and supporting documentation and the ER documentation that contained information on both the long-term and short-term considerations on economic, environmental and social issues that are relevant to the decision.

b)     The approval decision brief from the department and that:

i)     The action could pose threats of serious or irreversible harm to protected matters, in particular the Regent Parrot through construction impacts and removal of nesting trees, Murray cod, Silver perch and downstream Ramsar sites through operational impacts to water quality.

ii)     The conditions for avoidance and mitigation measures are current best practice for freshwater management and the requirement of an offset management plan for Regent Parrot are reasons for not postponing the action.

c)     The intent of the proposed action to restore floodplains is to ensure that the health, diversity and productivity of the environment is maintained into the future. The recommended conditions of approval allow for the proposed action to be delivered and operated in a sustainable way to protect listed threatened species and communities and the environment more broadly for future generations.

d)     I noted that the department considered the importance of conserving biological diversity and ecological integrity in relation to the controlling provisions for the proposed action and the larger VMFRP action, and the advice and recommendations provided within the approval decision brief reflected that consideration, which I also made.

e)     I agreed with the department’s advice that the costs of avoidance, mitigation and offset measures for the relevant impacts provide appropriate pricing and incentive mechanisms for the protection of the environment. I agreed that by applying the offsets policy, I incentivised avoidance and mitigation of impacts to Matters of National Environmental Significance (MNES).

74    The delegate stated that she had read and taken into account the Approval Brief, including the attached Victorian Minister’s report and the SIAC report: see EPBC Act, s 136(2)(b). After noting that the Department had informed her that it had taken into account the assessment and conclusions of the Victorian Minister’s report in making its recommendations, the delegate stated that she had also taken that report into account.

75    The delegate stated that she had taken into account relevant comments under ss 131 and 131AA(1) of the EPBC Act. The delegate considered that adequate public consultation for the proposed action had occurred, and therefore did not invite further public comment under s 131A of the EPBC Act.

76    The delegate had regard to the Proponent’s comments in relation to the proposed conditions attached to the approval. In that context, the delegate stated:

166)     I noted that the department had considered the need for conditions for all species including those that are known to occur or have the potential to occur. The main species the proponent queried were the Regent Parrot (Polytelis anthopeplus monarchoides) and Winged Peppercress (Lepidium monoplocoides). The department considered these species in the context of the larger VMFRP action and the cumulative impacts to the species and the department considered that the conditions are reasonable and necessary. I agreed with the department.

167)     I noted that the proponent provided comments that an offset management plan is not required for the Regent Parrot. The department undertook discussions with the proponent regarding the offset requirements for the larger VMFRP action. The proponent submitted an offset proposal for the proposed action that the department deemed adequate for the purposes of making the approval decision. The offset proposal must be formalised into an offset management plan to be approved by the Minister, for the residual significant impacts from the proposed action and from the larger VMFRP action.

77    The delegate considered that the comments from the Proponent had been appropriately addressed by the Department.

78    The delegate had regard to relevant recovery plans and threat abatement plans, including the “National Recovery Plan for the Regent Parrot”, which were provided as attachments to the Approval Brief. The delegate agreed with assessments by the Proponent, the State and the Department that approval of the Project would not be inconsistent with such obligations.

79    The delegate considered a range of other matters relevant to the approval decision, which are unnecessary to recount in detail for the purposes of the issues raised in the present proceeding.

80    In relation to the attachment of conditions under s 134 of the EPBC Act, the delegate relevantly found:

192)     I considered the likely scope and severity of the impacts to MNES, and the proposed avoidance and mitigation measures, and accepted the department’s advice that it was likely the action would result in a significant residual adverse impact on Regent Parrot, that it was necessary to offset.

81    Apart from compliance with conditions imposed by the State or by the Authority, the delegate addressed the Department’s recommended conditions:

202)     I noted the department considered the likely scope and severity of the impacts to MNES, and the proposed avoidance and mitigation measures, and determined that it was likely the    proposed action will result in a significant residual impact or adverse impact, if not conditioned, on Regent Parrot, Winged Peppercress, Murray cod and Silver perch, and I agreed. I also noted the department had considered the conditions imposed or likely to be imposed by Victoria and [the Authority], as described in the above paragraphs, and I considered the same. I agreed with the department’s advice that the conditions described in Assessment 1 – 5 (above) would be sufficient to manage the residual impacts to MNES resulting from the proposed action although there remains an unacceptable risk that recommended conditions will not be finalised in which case significant residual impacts may occur.

203)     I considered that it was necessary to apply conditions to the approval of the proposed action. The key conditions relating to protected matters have been discussed under each controlling provision above.

204)     As detailed in the assessment sections above, I considered that all recommended conditions attached to the decision were necessary or convenient to protect and/or repair and mitigate damage on a matter protected by provision of Part 3 for which the approval would have effect.

82    In particular, this purpose was achieved “through the alignment with the likely State and agency conditions where possible with necessary requirements for the protection of MNES stated in”, among other things:

•    An offset management plan (conditions 32 to 34) for the Regent Parrot that will offset the residual significant impact from the proposed action.

83    The delegate concluded as follows:

214)     In light of my findings above, I decided to approve, subject to conditions, the taking of the proposed action under ss 18 and 18A (Listed threatened species and communities). The approval will be in effect until 30 June 2049 to ensure that the offsets are managed in such a manner as to provide compensation for the residual impacts from the proposed action. As a floodplain restoration project, the intention of the proposed action is to continue the inundation of the floodplains and as such there will not be a decommissioning of the infrastructure of the proposed action. I consider that impacts from the construction should be adequately offset after 25 years and compliance of the operational component of the project will be adequately managed under state and MDBA obligations after the 25 year period.

LEGAL PRINCIPLES

EPBC Act

84    The objects of the EPBC Act are set out in s 3(1) and relevantly include:

(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; …

...

85    Section 3(2) of the EPBC Act relevantly provides that, in order to achieve its objects, the Act:

(a)     recognises an appropriate role for the Commonwealth in relation to the environment by focussing Commonwealth involvement on matters of national environmental significance and on Commonwealth actions and Commonwealth areas; and

...

(d)     adopts an efficient and timely Commonwealth environmental assessment and approval process that will ensure activities that are likely to have significant impacts on the environment are properly assessed; and

(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 …

...

86    Chapter 2 of the EPBC Act “provides a basis for the [Commonwealth] 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 … by prohibiting a person from taking an action without the Minister having given approval or decided that approval is not needed”: EPBC Act, s 11.

87    Relevantly to this proceeding, ss 18 and 18A of the EPBC Act prohibit a person from taking an action that has or will have, or is likely to have, a significant impact on a listed threatened species. Section 19(1) provides that this prohibition does not apply if an approval of the taking of the action by the person is in operation under Part 9 of the EPBC Act.

88    The term “impact” is defined by s 527E of the EPBC Act:

527E Meaning of impact

(1)     For the purposes of this Act, an event or circumstance is an impact of an action taken by a person if:

(a)     the event or circumstance is a direct consequence of the action; or

(b)     for an event or circumstance that is an indirect consequence of the action—subject to subsection (2), the action is a substantial cause of that event or circumstance.

(2)    For the purposes of paragraph (1)(b), if:

(a)    a person (the primary person) takes an action (the primary action); and

(b)    as a consequence of the primary action, another person (the secondary person) takes another action (the secondary action); and

(c)    the secondary action is not taken at the direction or request of the primary person; and

(d)    an event or circumstance is a consequence of the secondary action;

then that event or circumstance is an impact of the primary action only if:

(e)    the primary action facilitates, to a major extent, the secondary action; and

(f)    the secondary action is:

(i)    within the contemplation of the primary person; or

(ii)    a reasonably foreseeable consequence of the primary action; and

(g)    the event or circumstance is:

(i)    within the contemplation of the primary person; or

(ii)    a reasonably foreseeable consequence of the secondary action.

89    While the term “significant impact” is not defined by the EPBC Act, it is generally regarded as an impact that is “important, notable or of consequence having regard to its context or intensity”: Booth v Bosworth (2001) 114 FCR 39 at [99]–[100] (Branson J); VicForests v Friends of Leadbeater’s Possum Inc (2021) 285 FCR 70 at [62] (Jagot, Griffiths and SC Derrington JJ).

90    The balance of authority is that, in considering whether an action is likely to have a significant impact on a listed threatened species, the term “likely” refers to “a real or not remote chance or possibility”, in the sense of “prone” or “with a propensity” or “liable”, as distinct from a test of “more probable than not”: Save Our Strathbogie Forest Inc v Secretary to the Department of Energy, Environment and Climate Action [2024] FCA 317 at [337]–[343] (Horan J), referring to Polaris Coomera Pty Ltd v Minister for the Environment [2021] FCA 254 at [226] (Rangiah J); Friends of Leadbeater’s Possum v VicForests (No 4) [2020] FCA 704 at [1298] (Mortimer J); Northern Inland Council for the Environment Inc v Minister for the Environment (2013) 218 FCR 491 [91]–[92] (Cowdroy J); Booth at [97]–[98] (Branson J).

91    Chapter 4 of the EPBC Act deals with environmental assessment and approval of “controlled actions”, being actions that are prohibited by a provision in Part 3 from being taken without approval. A proposed action can be referred to the Minister for a decision whether or not the action is a controlled action: ss 68–71. Unless the Minister considers that it is clear that the action would have unacceptable impacts on a matter protected by Part 3 of the EPBC Act (s 74B), the Minister must decide whether the action that is the subject of a referral is a controlled action, and which provisions of Part 3 are controlling provisions (if any) for the action: s 75. When making that decision, the Minister must consider all adverse impacts, and must not consider any beneficial impacts, that the action has or will have, or is likely to have, on the matter protected by each provision of Part 3: s 75(2).

92    Part 8 of the EPBC Act provides for the assessment of the relevant impacts of controlled actions, to provide information for decisions whether or not to approve the taking of the actions: s 80. The “relevant impacts” of a controlled action are defined in s 82(1) as the impacts that the action has or will have, or is likely to have, on the matter protected by each of the controlling provisions for the action. The Minister must decide the approach to be used for assessment of the relevant impacts of a controlled action, which may include assessment by an accredited assessment process to be carried out under a law of the Commonwealth, a State or a self-governing Territory: s 87. For such purposes, the Minister must be satisfied that he or she will receive a report of the outcome of the assessment process “that will provide enough information on the relevant impacts of the action to let him or her make an informed decision whether or not to approve under Part 9 (for the purposes of each controlling provision) the taking of the action”: s 87(4).

93    Under Part 9 of the EPBC Act, the Minister must decide whether or not to approve the taking of a controlled action for the purposes of each controlling provision: s 130(1). The Minister is required to invite comments from relevant Ministers and from the proponent on the proposed approval decision and any conditions proposed to be attached to an approval: ss 131, 131AA. The Minister may also publish the proposed decision on the internet and invite public comments: s 131A.

94    Section 133 of the EPBC Act relevantly provides:

133     Grant of approval

Approval

(1)     After receiving the assessment documentation relating to a controlled action, or the report of a commission that has conducted an inquiry relating to a controlled action, the Minister may approve for the purposes of a controlling provision the taking of the action by a person.

…

Content of approval

(2)     An approval must:

(a)     be in writing; and

(b)     specify the action (including any alternative proposals approved under subsection (1A)) that may be taken; and

(c)     name the person to whom the approval is granted; and

(d)     specify each provision of Part 3 for which the approval has effect; and

(e)     specify the period for which the approval has effect; and

(f)     set out the conditions attached to the approval.

Note: The period for which the approval has effect may be extended. See Division 5.

95    Under s 134 of the EPBC Act, the Minister may attach a condition to the approval of the action if he or she is satisfied that the condition is necessary or convenient for protecting a matter protected by a provision of Part 3 for which the approval has effect, or repairing or mitigating damage to a protected matter.

96    Section 136 of the EPBC Act prescribes mandatory considerations that must be taken into account when making decisions under ss 133 and 134, and factors that must be taken into account when considering those matters.

(a)    Section 136(1) provides:

136     General considerations

Mandatory considerations

(1)     In deciding whether or not to approve the taking of an action, and what conditions to attach to an approval, the Minister must consider the following, so far as they are not inconsistent with any other requirement of this Subdivision:

(a)     matters relevant to any matter protected by a provision of Part 3 that the Minister has decided is a controlling provision for the action;

(b)     economic and social matters.

(b)    The factors that must be taken into account under s 136(2) in considering those matters include the principles of ecologically sustainable development, the assessment report (if any) relating to the action, and “any other information the Minister has on the relevant impacts of the action”. As mentioned above, the “relevant impacts” are defined for such purposes in s 82(1) as the impacts that the action has or will have, or is likely to have, on the matter protected by each of the controlling provisions for the action.

(c)    The Minister may consider whether the person is a suitable person to be granted an approval, having regard to the person’s history in relation to environmental matters: s 136(4).

(d)    The Minister must not consider any matters that he or she is not required or permitted by Div 1 of Part 9 of the EPBC Act to consider: s 136(5).

97    The operation of s 136 was addressed by Jessup J (with whom Kenny and Middleton JJ agreed) in Tarkine National Coalition Inc v Minister for the Environment (2015) 233 FCR 254 at [25]–[28]:

Returning to s 136, I would make four observations about the structure and content of this section. First, subss (1) and (2) made a distinction between the matters that the Minister “must consider” (subs (1)) and the things that the Minister “must take into account” in considering those matters (subs (2)). The purpose of subs (1), as it seems to me, was to mark out the broad categories of consideration to which the Minister was required to turn his mind, and specifically to require consideration not only of the matters protected by Pt 3 of the EPBC Act but also of matters that, otherwise, appear to be of no concern under that Act, namely, “economic and social matters”. Neither para (a) nor para (b) of s 136(1) dealt, at the level of detail, with particular matters that required consideration. For example, what, if any, particular “social matter” might have required consideration in a proposal that came before the Minister was, it seems, a matter for the Minister.

Secondly, the expression “matters relevant” in s 136(1) was not defined in the EPBC Act. By contrast, the expression “relevant impacts”, used in s 136(2)(e), was defined and gave content, at the level of detail, to the Minister’s obligation to take things into account. I shall return to this definition below.

Thirdly, while the range of things that the Minister was to take into account under subs (2) was extensive, with the exception of those referred to in paras (a) and (e), each was a concrete document or some similar existing artefact. In effect, what the Minister had to take into account were the contents of those documents or artefacts. This approach to regulation is to be contrasted with a situation in which the things to be taken into account were identified by description, or generically, such as, for example, where a decision-maker was required to take account of the condition of the habitat of a particular species. Subject to the exceptions mentioned, the scheme of s 136 was one in which it was assumed that specific subjects of this and similar kinds were already dealt with in the documents or artefacts referred to. The role of the Minister was to take into account the things that were before him in this way, rather than being either obliged or entitled to undertake additional research or investigations.

Fourthly, the terms of s 136(5) should be noted. While they require no further explanation, they confirm the impression that Subdiv B established a closed system of the matters that the Minister was to consider in making his decision, and the things that should be taken into account.

See also Minister for the Environment v Sharma (2022) 291 FCR 311 at [84]–[87] (Allsop CJ), [491]–[496] (Beach J).

98    In so far as s 136(1)(a) requires the Minister to consider “matters relevant to” any matter protected by a controlling provision (i.e. a matter of national environmental significance), the identification of such relevant matters remains largely for the Minister: see Tarkine at [45] (Jessup J), referring to Blue Wedges Inc v Minister for Environment, Heritage and the Arts (2008) 167 FCR 463 at [115] (North J). Thus, Jessup J in Tarkine (at [45]) took the view that “s 136(1)(a) could not be used as a means to make the Minister’s choice of subject matter justiciable in a court”, and continued:

I do not regard this provision as the source of any obligation to take particular matters into account, in point of detail. So long as the Minister, in making his or her approval decision, proceeded by reference to the categories in s 136(1), the decision could not be assailed on the ground that some particular matter, falling within either para (a) or para (b), had not been considered. The particular matters that had to be taken into account were the concern of subs (2).

99    In the present case, the applicant relies in particular on the obligation under s 136(2)(e) to take into account “any other information the Minister has on the relevant impacts of the action”. It may be observed that this obligation is in terms directed to the information that is before the Minister about the relevant impacts, as opposed to the relevant impacts themselves. As Jessup J noted in Tarkine, this does not suggest any obligation to undertake additional investigations or research. Nevertheless, in so far as the Minister has any information about the impacts that the action will have, or is likely to have, on a protected matter of national environmental significance (here, the listed threatened species), the Minister must have regard to that information when deciding whether to approve the action.

100    The Minister must also take into account the principles of ecologically sustainable development (ESD principles), which are set out in s 3A of the EPBC Act:

3A Principles of ecologically sustainable development

The following principles are principles of ecologically sustainable development:

(a)     decision-making processes should effectively integrate both long-term and short-term economic, environmental, social and equitable considerations;

(b)     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;

(c)     the principle of inter-generational equity—that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations;

(d)     the conservation of biological diversity and ecological integrity should be a fundamental consideration in decision-making;

(e)     improved valuation, pricing and incentive mechanisms should be promoted.

101    Section 391 provides that the Minister must take account of the precautionary principle in making certain decisions, including a decision under s 75 whether an action is a controlled action and a decision under s 133 whether or not to approve the taking of an action. Section 391(2) provides that 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”. As such, the substance of the precautionary principle is incorporated in the ESD principles by s 3A(b).

102    Part 13 of the EPBC Act provides for the Minister to establish a list of threatened species by legislative instrument: see ss 178–179. Relevantly, a native species is eligible to be included in the vulnerable category at a particular time if it is not critically endangered or endangered, and it is facing a high risk of extinction in the wild in the medium-term future, as determined in accordance with the prescribed criteria: s 179(5). The Regent Parrot (eastern subspecies) (Polytelis anthopeplus monarchoides) has been listed under the EPBC Act in the vulnerable category.

GROUNDS OF REVIEW

The application for review

103    By an amended application dated 6 March 2025, the applicant seeks judicial review of the approval decision on two bases, each of which is alleged to have involved legal error in assessing the environmental impacts and offsetting benefits attributable to the controlled action. Broadly speaking, the applicant contends that this assessment required the delegate to compare the “factual” scenario in which the controlled action takes place with a “counterfactual” scenario in which the controlled action does not take place.

104    First, the applicant alleges that, in purporting to assess the impacts and benefits of the Project, the delegate failed properly to consider the risk that the environmental benefits would not be delivered, including the risk of “incorrect, or prolonged inundation events” as a result of the Project.

105    Second, the applicant alleges that, in concluding that the Project may provide environmental benefits from increased flows of water to the floodplain areas, the delegate failed properly to identify the counterfactual scenario in which the Project does not take place.

(a)    In particular, the applicant contends that the delegate failed to consider the situation in which different actions were taken in order to comply with the targets required to be met under the Water Act and the Basin Plan, which might include alternative projects (such as constraint measures) or the purchase of water from consumptive users. On the basis that such alternatives could realistically have delivered the same or similar environmental benefits, the applicant argues that those benefits were not properly attributed to the Project.

(b)    In such circumstances, the applicant submits that the delegate erred by proceeding on the basis that the counterfactual to the Project was to “do nothing”. Alternatively, if the delegate had regard to the counterfactual scenarios described in the Proponent’s Offset Strategy, those scenarios were not appropriate because they relied on outdated hydrological modelling and were based on incorrect assumptions that were inconsistent with the applicable legal framework at the time of the approval decision.

106    The applicant described these alleged errors as the “erroneous factual” and the “erroneous counterfactual” respectively. The applicant submitted that they resulted in the delegate having failed to consider the true impacts of the Project, which was characterised as giving rise to a range of legal errors: i.e. a misapprehension of the statutory task; legal unreasonableness or irrationality; a failure to take into account the ESD principles, including the precautionary principle; or a failure to take into account the impacts of the controlled action on a listed threatened species as required by the EPBC Act.

107    These matters are framed as follows in the amended originating application:

11C.     In the premises of 7 to 10 and 11A and 11B, to assess whether the perceived neutralizing or improving impacts to Regent Parrot habitat were properly attributable to the controlled action, the delegate was required to consider, but failed to consider:

a.     whether, in the counterfactual, those impacts would likely be achieved in any event in a future where the Basin Plan was implemented to achieve water recovery of 3200GL per year (not 2750GL); and/or

b.     whether, in the counterfactual, those impacts would likely be achieved in any event in a future where implementation of the Basin Plan might have required constraints management projects; and/or

c.     whether, in the factual, those impacts were sufficiently likely to actually be achieved, so as to weigh up the neutralizing or improving impacts against the detrimental impacts of the controlled action, as required by the EPBC Act.

Particulars

The delegate was required to take into account the principles of ecologically sustainable development (s 136(2)(a) of the EPBC Act) and the precautionary principle (s 391 of the EPBC Act). Those principles are also reflected in Offset Principles in the Environmental Protection and Biodiversity Conservation Act 1999 Environmental Offsets Policy dated October 2012 (Policy), in particular, that offset strategies must effectively account for and manage the risks of the offset not succeeding (Policy, Offset Principles, 5); and be scientifically robust and reasonable (Policy, Offset Principles, 7).

12.     In the premises, by failing to identify and analyse the proposed action against an appropriate counterfactual, and by relying on an inadequate offset, the delegate:

a.     failed to consider the impacts of the controlled action on the Regent Parrot as required by s 136(1)(a) and 136(2)(e) of the EPBC Act;

b.     failed to adequately consider the precautionary principle as required by s 391 of the EPBC Act;

b1.     failed to take into account the principles of ecologically sustainable development, as required by s 136(2)(a) of the EPBC Act.

c.     misconceived her statutory task or asked the wrong question; or

d.     otherwise arrived at a decision that was irrational or legally unreasonable.

13.     If the delegate had properly considered the situation where the controlled action did not take place, she could realistically have concluded that one or more different actions would take place instead and deliver the same or sufficiently similar environmental benefits, including to the Regent Parrot habitat, so as to change her assessment of the appropriateness of the controlled action.

108    In its written submissions, the applicant encapsulated its arguments in relation to both the “erroneous factual” and the “erroneous counterfactual” in the following terms:

… the Applicant’s argument is at heart a simple one. It cannot be consistent with the EPBC Act for a decision-maker to approve the certain destruction of critical habitat of a threatened species – bearing in mind that the habitat takes some 160 years to form, in essence irreplaceable – because of an offset mechanism that lacks anything close to a commensurate degree of certainty in terms of benefit to that habitat and species. And a project cannot, consistent with the objectives of the EPBC Act, rationally be found to deliver environmental benefits capable of offsetting harms, when assessed in a factual vacuum and without consideration of whether the supposed benefits would be delivered without the Project in any event.

Standing

109    The applicant was registered on 17 September 2020 under the Associations Incorporation Reform Act 2012 (Vic). Its stated purposes relevantly include to “[w]ork towards the protection of river red gum and black box wetland forests and their flora, fauna and ecological values by means of citizen science, collaboration and community engagement”, to “[p]rovide critical support for the management of the Nyah Vinifera Park, to protect cultural landscape and natural values”, to “[r]aise general community’s awareness about water policy and projects, building deep knowledge and understanding about water and how it is valued”, and to “campaign for wise and effective management of the Parks, Reserves and State Forests of the region”.

110    In the two years prior to the approval decision, the applicant engaged in a series of activities for the protection or conservation of the environment, including by raising community awareness of VMFRP projects and participating in consultation about such projects. The applicant made written submissions in relation to the assessment of the Project under the EE Act, and made oral submissions to the inquiry conducted by SIAC in relation to the Project.

111    Section 487 of the EPBC Act provides extended standing for judicial review of decisions made under the Act. Section 487(3) of the EPBC Act provides:

(3)     An organisation or association (whether incorporated or not) is taken to be a person aggrieved by the decision, failure or conduct if:

(a)     the organisation or association is incorporated, or was otherwise established, in Australia or an external Territory; and

(b)     at any time in the 2 years immediately before the decision, failure or conduct, the organisation or association has engaged in a series of activities in Australia or an external Territory for protection or conservation of, or research into, the environment; and

(c)     at the time of the decision, failure or conduct, the objects or purposes of the organisation or association included protection or conservation of, or research into, the environment.

112    Neither the Minister nor the Proponent disputed that the applicant has standing as a person aggrieved by the approval decision in accordance with s 487(3) of the EPBC Act. In such circumstances, the applicant’s standing to bring this proceeding may be accepted.

The reasons for the approval decision

113    The applicant raised a threshold issue in relation to the identification of the reasons for the delegate’s decision.

114    The Reasons were produced pursuant to a request made by the applicant under s 13 of the ADJR Act. They were provided some months after the approval decision was made by the delegate, although they were based substantially on material that was before the delegate when making that decision, including in particular the Legal Considerations Report.

115    The evidentiary status of a statement of reasons provided under s 13 of the ADJR Act has been considered in several previous decisions of this Court. It may be noted that r 31.03(1) of the Federal Court Rules 2011 (Cth) requires an applicant who seeks relief under the ADJR Act to file any statement of reasons given to the applicant under s 13 of the ADJR Act, or any other statement given by or on behalf of the decision-maker purporting to set out findings of facts, or a reference to the evidence or other material on which those findings were based, or the reasons for making the decision. Nevertheless, this rule does not itself render a statement of reasons admissible at the trial: see Minister for Immigration, Local Government and Ethnic Affairs v Taveli (1990) 23 FCR 162 at 165 (Davies J), 187 (Hill J).

116    A statement of reasons that is made after the event will not generally be received as evidence in favour of the person making the statement, in so far as it is “both self-serving and a narrative of the past event which purports to be the equivalent of or a substitute for direct testimony of the event it narrates”: CRI026 v Republic of Nauru (2018) 92 ALJR 529 at [61] (Kiefel CJ, Gageler and Nettle JJ), referring to Taveli at 187 (Hill J); see also Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190 at [46]–[59] (French J). However, a statement of reasons may be admissible if it forms part of the decision-making process, or otherwise in accordance with the ordinary rules of evidence (for example, as a business record, as an admission, or by consent): Taveli at 168 (Davies J).

117    There may be limitations on the use of a statement of reasons, particularly as evidence of any facts stated therein: see e.g. Minister for Immigration and Ethnic Affairs v Arslan (1984) 4 FCR 73 at 75–76 (Sweeney, St John and Morling JJ). Assuming that the authenticity of the statement is not in issue, it may ordinarily be treated “as evidence of the truth of what it says, namely, that the findings made, the evidence referred to and the reasons set out were those actually made, referred to and relied upon in coming to the decision in question and that no finding, evidence or reason which was of any significance to the decision has been omitted”, at least subject to any evidence from which a contrary inference may be drawn: Taveli at 179–180, 182 (French J). In other words, the statement of reasons provides evidence of the decision-maker’s state of mind when making the decision, as opposed to the underlying facts on which the decision was based.

118    In Stambe v Minister for Health (2019) 270 FCR 173, Mortimer J (at [70]–[77]) sounded a note of caution about drawing inferences from a statement of reasons that was prepared and adopted after the exercise of a statutory power, particularly in determining what the decision-maker had in fact read or considered when exercising the relevant power, in the absence of direct evidence about such matters. Her Honour distinguished cases in which draft reasons were prepared and provided to the decision-maker, who adopted those reasons at the time that the power was exercised: Stambe at [73]. In such cases, the drawing of inferences may be assisted by evidence of “handwriting, or marks such as circles or underlining” on a briefing note provided to the decision-maker: Stambe at [74].

119    In the present case, the Reasons were tendered by the applicant, who relied on their contents as admissions against the Minister. The respondents did not object to that tender, and the Reasons were therefore admitted into evidence by consent.

120    However, in the absence of direct evidence from the delegate, the applicant submitted that no inferences should be drawn in favour of the Minister from the Reasons, referring to Stambe at [76]–[77]. More specifically, the applicant took issue with a particular sentence in paragraph 51 of the Reasons, in which the delegate stated:

The department reviewed a proposed strategy and was satisfied that it demonstrated the adequacy of an on-site offset for the Regent Parrot, and I accepted the department’s advice and was satisfied of the same matter.

(Emphasis added.)

The applicant sought a limitation under s 136 of the Evidence Act 1995 (Cth) to prevent the concluding words of this sentence from being used for the hearsay purpose of proving the “historical fact” that the delegate had independently reviewed the Offset Strategy and satisfied herself as to the adequacy of the on-site offset for the Regent Parrot, as opposed to having reached that state of satisfaction solely on the basis of her acceptance of the Department’s advice. It was submitted that such a use of this evidence would be unfairly prejudicial to the applicant, in circumstances where the statement was self-serving and the delegate was not available to be cross-examined on this matter.

121    I ruled in the course of the hearing that I was not prepared to limit the use of the relevant words in the Reasons at [51] pursuant to s 136 of the Evidence Act in the manner sought by the applicant. The applicant does not take any issue with the words being used as evidence that the delegate was satisfied of the relevant matter (i.e. that the Offset Strategy demonstrated the adequacy of an on-site offset for the Regent Parrot), but rather is concerned with the inferences that might be drawn about the basis on which such a state of satisfaction was reached by the delegate, including in particular whether the delegate herself read and considered the contents of the Offset Strategy for the purposes of forming that state of satisfaction. In many respects, this ultimately turns on the proper construction of the Reasons, rather than any particular “use” to be made of the evidence in the sense contemplated by s 136 of the Evidence Act. In my view, it is not appropriate to seek a limitation under s 136 of the Evidence Act in order to constrain the construction that might otherwise be available to be given to the Reasons, considered as a whole: cf. Kelly v Minister for the Environment and Water [2025] FCA 264 at [68] (Perry J).

122    In this regard, it should also be recalled that the Reasons are not the only evidence of the delegate’s reasons for making the approval decision, and the materials considered by the delegate in making that decision:

(a)    The delegate contemporaneously recorded her decision by signing and making handwritten annotations on the Approval Brief, which included an indication that she had considered the information in the brief and its attachments, including “the proposed approval decision package” comprised in the Proposed Approval Brief and its attachments. The delegate also indicated on the Approval Brief that she accepted the reasoning in the departmental briefing package as the reasons for her decision.

(b)    The delegate had in turn indicated by handwritten annotations on the Proposed Approval Brief that she considered the information in that brief and its attachments, including the Legal Considerations Report (which was later substantially reproduced in the Reasons).

(c)    The Offset Strategy was included as one of the attachments to the Proposed Approval Brief.

(d)    The comments on the Proposed Approval Brief, which appear to have been inserted by the delegate electronically under her signature block, specifically acknowledged the “comprehensive assessment package” that had been provided.

123    It is unnecessary to place any reliance on paragraph 20 of the Reasons, in which the delegate listed the material that she had considered in making the approval decision. While this paragraph is consistent with the contemporaneous indications made by the delegate on the decision briefs, it may not itself support an inference about what the delegate in fact considered at the time when the statutory power was exercised, in the absence of any direct evidence: cf. Stambe at [60]–[62], [70], [72] (Mortimer J).

Did the delegate adopt an “erroneous factual” as to the future with the Project?

124    The applicant’s argument commences from the proposition that the delegate was required to consider the relevant impacts of the Project on the Regent Parrot as a listed threatened species for the purposes of ss 18 and 18A of the EPBC Act. Thus, the applicant relevantly submitted:

Central to the Minister’s statutory task was a consideration of the impacts of the Project on the Regent Parrot. Significant impact on threatened species and communities was the very reason the Project required assessment as a controlled action. The requirement to consider those impacts is further reflected in the mandatory considerations spelled out in s 136 of the EPBC Act, particularly ss 136(1)(a) and 2(e).

125    As discussed above, s 136(1)(a) of the EPBC Act, in requiring the Minister to consider matters relevant to any matter protected by a controlling provision, is not necessarily prescriptive as to the identification of the particular matters that are considered by the Minister to be relevant for such purposes. Section 136(2)(e), on the other hand, required the Minister to “take into account … any other information the Minister has on the relevant impacts of the action”. The reference to “other information” follows on from the specification in s 136(2)(b)–(d) of the report or other documentation that was given to the Minister as the outcome of the environmental assessment carried out under Part 8, and specifically includes a report given under a strategic assessment pursuant to an agreement under Part 10. The obligation is to take into account the information on the relevant impacts of the controlled action, rather than a direct requirement to consider the relevant impacts themselves.

126    That does not mean that there are no legal constraints on the manner in which the Minister assesses the information that is before him or her in order to exercise the discretion whether or not to approve the taking of a controlled action for the purposes of a controlling provision. Among other things, the Minister must correctly understand the statutory task and the applicable legal principles, and must exercise the discretion in accordance with the requirements of legal reasonableness.

127    Nevertheless, the submissions advanced by the applicant perhaps too readily assumed that the delegate was required to identify and consider the impacts of the Project on the Regent Parrot, and that any failure to do so properly or correctly would give rise to legal error. In particular, the applicant argued that, in order to “isolate the consequences of the action”, it was necessary for the delegate “to compare hypothetical futures both with the action (the factual) and without the action (the counterfactual)”, referring to Tarkine at [41] (Jessup J). This led to the submission that the delegate’s analysis of the offsetting benefits of the Project “was affected by legal error both in relation to her assessment of the benefits with the Project, and in relation to her assessment of the benefits without the Project” (emphasis in original), such that “the statutory task of considering the impacts of the Project miscarried” because both the factual and the counterfactual were “improperly constituted”.

128    There was some imprecision or latitude in relation to the precise nature of the legal error that was alleged to have been made by the delegate in this regard. It was variously identified in the amended originating application as involving: a failure to consider the impacts of the Project on the Regent Parrot “as required by s 136(1)(a) and 136(2)(e) of the EPBC Act”; a failure to adequately consider the precautionary principle as required by s 391; a failure to take into account the ESD principles as required by s 136(2)(a), a misconception of the statutory task or asking the wrong question; or arriving at a decision that was legally irrational or legally unreasonable.

129    Provided that the delegate properly considered the matters relevant to any matter protected by ss 18 and 18A, including matters relevant to any significant impact that the action would have or was likely to have on a listed threatened species, and took into account the factors specified in s 136(2), it was for the delegate to make findings of fact in relation to the impacts and benefits of the Project and to balance the competing considerations in determining whether the action should be approved and, if so, on what conditions.

130    In relation to the “erroneous factual” (that is, the future with the Project), the applicant noted the delegate’s reasoning that approving the Project with the proposed conditions and offset strategy would reduce the level of impact to the Regent Parrot and adequately compensate for the impacts of construction on potential breeding habitat: Reasons at [61].

131    In this context, the delegate relevantly found as follows:

(a)    the Project area contained 191 hectares of potential breeding habitat that could be used as an on-site offset, in that they were areas within the EVCs associated with potential breeding habitat that were located within 120 metres of major waterways (Reasons at [46]–[47]);

(b)    the Proponent had proposed an on-site offset area of 43 hectares of foraging and breeding habitat, including an area of 28 hectares of potential breeding habitat (Reasons at [48]);

(c)    the broad objectives would be to “maintain the current intactness” of breeding habitat within the Project area that would benefit from the managed watering events as part of the Project, and the benefit “would be assessed by improved forest and woodland stand condition, the prevention of negative changes to this habitat and the existing populations of Regent Parrot, that may be caused by habitat degradation” (Reasons at [49]);

(d)    the offsets would be achieved by changed hydrology on the floodplain and improved inundation patterns required to support hollow bearing tree species (Reasons at [50]); and

(e)    the potential benefit of hydrological flows onto the floodplain could lead to an improvement in the condition of suitable habitat for the Regent Parrot, although “incorrect, or prolonged inundation events could lead to tree dieback and a decline in suitable habitat or very large hollow bearing trees for the species” (Reasons at [56]).

132    I interpolate that there is some ambiguity as to whether the reference to “incorrect, or prolonged inundation events” was directed to potential consequences or impacts of the Project, or was recognising an existing risk, or possibly encompassed both. In this regard, the SIAC report and the Offset Strategy each noted that the threats to the Regent Parrot identified in the National Recovery Plan included “[a]ltered hydrological regimes causing stress and death of River Red Gums due to prolonged immersion, waterlogging, reduced flooding, salinisation and extended drought”: see also Victoria, Department of Sustainability and Environment, National Recovery Plan for the Regent Parrot (eastern subspecies), October 2011, at pp 10–11. Nevertheless, the reference to “incorrect” inundation events appears to be consistent with the outcome of hydrological regimes affected by human intervention or regulation, whether as a result of the Project or otherwise. Further, the commencement of the relevant sentence with the word “[h]owever” suggests that a counterpoint was being provided to the potential benefit of hydrological flows onto the floodplain arising from the operation of the Project.

133    The applicant submitted that the delegate relied solely on the Department’s assessment of the adequacy of the Offset Strategy, and that the basis of that assessment was not disclosed in the briefing materials provided to the delegate. However, it was open to the Minister (or his or her delegate) to refer to and rely on technical advice provided by relevant officers of the Department in relation to the adequacy of the on-site offset under the Proponent’s Offset Strategy: compare, e.g., Fastbet Investments Pty Ltd v Deputy Commissioner of Taxation (No 5) [2019] FCA 2073 at [133]–[140] (Derrington J); see also Minister for Immigration, Citizenship and Multicultural Affairs v McQueen (2024) 282 CLR 1 at [18]–[25] (Gageler CJ, Gordon, Edelman, Steward and Gleeson JJ). Although the applicant essentially contended that the Department’s analysis of the Offset Strategy was absent or incomplete, the key aspects of the proposed offset were summarised in the briefing materials and identified in the Legal Considerations Report, as was ultimately reflected in the Reasons at [45]–[51]. The Offset Strategy itself was included in the materials that were provided to the delegate. In my view, it is a reasonable inference that the delegate had regard to the Offset Strategy when making her decision, particularly in the light of her indication on the Approval Brief and the Proposed Approval Brief that she had considered the information in the briefs and their attachments with specific reference to the “comprehensive assessment package”.

134    If necessary, I would construe the reference in the Reasons at [51] to the delegate having “accepted the department’s advice” on the adequacy of the on-site offset and having been “satisfied of the same matter” as meaning that the delegate had reached a similar view to the Department based on her own consideration of the Offset Strategy. However, that construction is perhaps more relevant to the forensic issue raised by the applicant’s submissions on the “erroneous counterfactual”, in so far as the applicant contends that the delegate did not in fact have regard to the section within the Offset Strategy that modelled a scenario under the Basin Plan without the Project.

135    The central argument advanced by the applicant in relation to the so-called “erroneous factual” rests on a contention that the projected benefits of the Project for the habitat of the Regent Parrot were highly uncertain. In particular:

(a)    The projected improvements under the Offset Strategy constituted only a small improvement in the quality of the breeding habitat in the offset area, with an increase in the site condition score from 2/3 to 3/3, and the ecological benefits would be delivered over an extended period of 15 years. While the Offset Strategy predicted that the site condition would continue to decline without the Project, it stated that it was difficult to quantify the likely extent of that decline.

(b)    Further, while the Offset Strategy stated that the predicted improvement in River Red Gum tree health was “expected to improve breeding success and population size at Nyah”, it did not make any adjustment to the score for the species stocking rate “because of the difficulty in monitoring Regent Parrot population size accurately enough at the site level to confidently detect an increase in numbers”.

(c)    As noted in the Reasons at [56], there was a risk of incorrect or prolonged inundation events that could lead to a decline in suitable habitat. Further, in relation to the expectation for overall biodiversity improvement and benefit in the long term from the Project, the delegate noted that “there were limitations of information presented in the ER documentation with both the SIAC report and [Victorian] Minister’s report recommending further analyses should be undertaken to understand the response of vegetation communities across the inundation area”: Reasons at [135].

136    Accordingly, the applicant submitted as follows:

The Offset Strategy does not include any measures that would deliver the assumed benefits in the event that the assumed inundation outcomes were not achieved, nor in the event that the controlled action resulted in incorrect and prolonged inundation events. The capacity of the Offset Strategy to deliver any benefits at all was therefore contingent upon the controlled action delivering the assumed inundation outcomes and not resulting in incorrect or prolonged inundation events.

137    The applicant submitted that these matters “needed to be properly considered when bringing to account the supposed benefits of the Offset Strategy with the impacts of the controlled action”, and that the delegate’s reasons did not disclose any proper consideration of that difficulty, particularly given the delegate’s “reliance on the bald assertion that the Department ‘deemed’ the Offset Strategy to be adequate”.

138    The applicant submitted that the delegate had purported to offset impacts that would be certain or highly likely to destroy critical habitat for the Regent Parrot with uncertain benefits to different habitat that might never eventuate. Such an approach was said to give rise to legal error on the basis that it involved a failure to consider the impacts of the Project, or exhibited a lack of rationality or reasonableness, or manifested a failure to take into account the precautionary principle and other ESD principles.

139    In my view, the applicant’s arguments amount to an impermissible attempt to revisit or reagitate the merits of the delegate’s consideration of the impacts and the offsetting benefits of the Project for the habitat of the Regent Parrot. The EPBC Act is not so prescriptive as to the manner in which the Minister must identify and balance the matters relevant to the matter protected by the controlling provisions or the economic and social matters. I find that the delegate had regard to and took into account the assessment reports relating to the Project, together with any other information that she had on the relevant impacts of the action, including the Offset Strategy.

140    Further, in concluding that the approval of the Project on the specified conditions may provide environmental benefits that meet the objectives of the EPBC Act (Reasons at [131]), the delegate had regard to the ESD principles as required by s 136(2)(a). The delegate found that the approval decision “would promote ecologically sustainable development through the conservation and ecologically sustainable use of natural water resources in the Murray-Darling Basin and the support of initiatives developed under the [Basin Plan]”: Reasons at [131(b)].

141    The delegate specifically addressed each of the ESD principles as set out in s 3A of the EPBC Act, including the precautionary principle: Reasons at [154]. This included findings in relation to the long-term and short-term considerations on economic, environmental and social issues; the threats of serious or irreversible harm to protected matters, including the Regent Parrot, and the conditions for avoidance and mitigation measures and the requirement for an offset management plan; the maintenance of the health, diversity and productivity of the environment for the benefit of future generations; the conservation of biological diversity and ecological integrity in relation to the controlling provisions; and the pricing and incentive mechanisms associated with the costs of avoidance, mitigation and offset measures for the relevant impacts of the action: Reasons at [155].

142    The applicant relied on authorities in relation to the precautionary principle as being “properly seen as being directed to the quality of proof that is needed concerning a risk of environmental damage that might bear upon a particular decision”, and as setting “a standard as to the level of certainty on which a decision may be based”, citing Friends of the Gelorup Corridor Inc v Minister for the Environment and Water (No 2) [2022] FCA 1554 (FOGC (No 2)) at [61] (Colvin J); see also Friends of the Gelorup Corridor Inc v Minister for the Environment and Water (2023) 299 FCR 236 (FOGC FC) at [83], [88], [93] (Jackson and Kennett JJ).

143    In the present context, there was no relevant uncertainty as to the impact of the construction phase of the Project on the critical habitat of the Regent Parrot. The delegate relevantly accepted that vegetation clearing and noise from construction could result in the loss of breeding habitat and breeding disturbance, such that the Project would have a residual significant impact on an important population of the Regent Parrot (that is, an impact that remained after avoidance and mitigation measures). The question addressed by the delegate was directed to whether there were offsetting environmental benefits which compensated for that impact so as to warrant the approval of the Project, subject to appropriate conditions. Neither the precautionary principle nor the ESD principles required the offsetting benefits to be proven to any particular level of certainty, nor did they dictate the outcome of the approval decision: compare FOGC (No 2) at [61], [64], [71], [76]–[77] (Colvin J).

144    The precautionary principle may be viewed as “a way of reasoning” or “a way of describing how to approach risk and uncertainty in undertaking the evaluative process” in deciding whether to approve a controlled action: FOGC (No 2) at [50], [58] (Colvin J); see also FOGC FC at [88], [90], [93] (Jackson and Kennett JJ), [172], [174] (Feutrill J). In other words, the principle is “a decisional rule concerning how evidence is to be acted upon rather than a relevant consideration in the sense of a factor to be given more or less weight in an evaluative or discretionary decision”: FOGC FC at [88] (Jackson and Kennett JJ). The precautionary principle, and the ESD principles more generally, contain “overarching rules or principles for decision-making” or “an approach to decision-making”: FOGC FC at [90], [93] (Jackson and Kennett JJ). As such, the precautionary principle requires “the observance of a particular approach to the level of proof, particularly the degree of scientific certainty, that may be required before a risk of serious or irreversible environmental damage might be brought to account in the decision making process”: FOGC (No 2) at [51], [58] (Colvin J). The principle applies in circumstances where there is a lack of full scientific certainty in respect of a threat of serious or irreversible environmental damage, and operates to shift the evidentiary burden of proof so as to ensure “preventative anticipation” in respect of such damage: Telstra Corporation Ltd v Hornsby Shire Council (2006) 67 NSWLR 256 at [128]–[129], [138], [140], [150]–[152] (Preston CJ).

145    In this way, the function of the precautionary principle, where it applies, is “to require the decision-maker to assume that there is, or will be, a serious or irreversible threat of environmental damage and to take this into account, notwithstanding that there is a degree of scientific uncertainty about whether the threat really exists”: Telstra Corporation at [152] (Preston CJ). Such an approach does not directly apply to the assessment of environmental benefits that are relied upon as offsets to a known or assumed threat of environmental damage, nor to the level of certainty required in order for such offsetting benefits to be taken into account in the evaluative assessment of whether an approval should be granted. Rather, the precautionary principle may inform an assessment of whether a proposed offset adequately compensates threatened environmental harm (see further at paragraph [155] below, in relation to the Offsets Policy).

146    It can be accepted that, as Jackson and Kennett JJ observed in FOGC FC at [92]:

Reasoning forming part of an approval decision that was not consistent or in harmony with the precautionary principle would potentially result in the decision being set aside, on the basis that “account” had not been taken of that principle, notwithstanding that the principle does not apply according to its terms.

The decision-maker “must be aware of the precautionary principle and mindful of its place in the statutory scheme (including as part of the principles of ecologically sustainable development whose promotion is part of the objects of the EPBC Act …)”: FOGC FC at [92], [94]–[95]. An assessment of the likely impacts of a proposed action on a matter protected by Part 3 of the EPBC Act, and the weighing of those impacts against the social and economic benefits of the proposed action, must “be done consistently with the value embodied in the precautionary principle”: FOGC FC at [93].

147    Nevertheless, having accepted that there was a residual significant impact on the breeding habitat of the Regent Parrot within the construction footprint of the Project, it was open to the delegate to have regard to ecological benefits to breeding habitat in other parts of the Project area.

148    The delegate did not fail to take account of the precautionary principle when deciding to approve the Project nor when specifying the conditions of that approval. The weight to be given to that principle along with other relevant considerations and factors was ultimately a matter for the delegate in exercising the discretion conferred by s 133 of the EPBC Act: see Lawyers for Forests Inc v Minister for the Environment, Heritage and the Arts [2009] FCA 330 at [36] (Tracey J); compare Telstra Corporation at [154] (Preston CJ). The delegate acknowledged the threat of serious or irreversible harm to the Regent Parrot, and found that “[t]he conditions for avoidance and mitigation measures are current best practice for freshwater management and the requirement of an offset management plan for Regent Parrot are reasons for not postponing the action”: Reasons at [155(b)]. This may be understood in context as treating the approval of the Project with the specified conditions as a proportionate measure to prevent degradation of the environment in the Nyah floodplain area.

149    Further, any uncertainty that might otherwise arise in relation to the offsetting ecological benefits for the Regent Parrot must be viewed in the light of the conditions attached to the approval. In particular, conditions 32 to 34 require the Proponent to submit an Offset Management Plan to compensate for the residual significant impacts on the Regent Parrot, and provide for the Minister to approve the Offset Management Plan before commencement of the Project. Among other things, the Offset Management Plan is to be prepared by a suitably qualified expert, must demonstrate how it will fully compensate for the residual harm on protected matters, must commit to achievable ecological outcomes for the Regent Parrot and the offset area and timeframes for their achievement, and must include a table of commitments to achieve the environmental objectives. The Offset Management Plan must also include reporting and review mechanisms and a monitoring program.

150    There was no suggestion in the present case that the conditions in relation to the Offset Management Plan amounted to a deferral of the evaluative assessment involved in approving the controlled action under s 133 of the EPBC Act, or were otherwise uncertain: cf. FOGC FC at [52]–[53], [57], [60]–[61] (Jackson and Kennett JJ), [114], [120]–[123], [146]–[148] (Feutrill J).

151    For similar reasons to those set out above, it cannot be said that the approach adopted by the delegate was outside the bounds of legal reasonableness. I proceed on the basis that the power conferred by s 133 of the EPBC Act is subject to an implied condition that it “must be exercised according to the ‘rules of reason and justice’”, such that each step in the decision-maker’s assessment of the impacts of the proposed action “needs to have a rational basis”: FOGC FC at [65] (Jackson and Kennett JJ); see generally Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [24]–[30] (French CJ), [63] (Hayne, Kiefel and Bell JJ), [88]–[94] (Gageler J); Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at [4] (Kiefel CJ), [53] (Gageler J), [89] (Nettle and Gordon JJ), [131] (Edelman J). Nevertheless, the threshold for establishing legal unreasonableness is high, and involves more than mere disagreement with the merits of the decision: see Li at [30] (French CJ), [66] (Hayne, Kiefel and Bell JJ), [108]–[109], [113] (Gageler J).

152    The applicant submitted that “if a proposed action presents not merely a threat of serious or irreversible environmental damage, but a certainty or even high likelihood of such damage, then that cannot rationally be justified on the basis of ‘offsetting’ benefits that lack even close to the same degree of certainty or likelihood” (emphasis in original). However, the power to approve a controlled action under s 133 of the EPBC Act is not rigidly constrained in this way. In so far as the construction phase of the Project gave rise to residual significant impacts on the Regent Parrot, it was open to the delegate to consider whether those impacts were acceptable, and whether conditions could be imposed to limit or reduce the impacts or to bring about offsetting benefits: FOGC FC at [64] (Jackson and Kennett JJ). While the level of certainty of any proposed offset should be taken into account, the EPBC Act does not mandate a calculus by which the degree of certainty of environmental damage must be balanced by an equivalent level of certainty of offsetting ecological benefits.

153    This is notwithstanding the “balance sheet approach” employed to measure impacts and offsets under the Department’s Environment Protection and Biodiversity Conservation Act 1999: Environmental Offsets Policy (October 2012), and the accompanying Offsets assessment guide. While the Offsets Policy does not establish binding rules, it “provides a relatively detailed framework designed to bring rigour to decision-making about the utility of measures that are offered by proponents and claimed to ‘offset’ environmental damage”: FOGC FC at [37] (Jackson and Kennett JJ); see also at [106], [136] (Feutrill J). It may be noted that the conditions attached to the approval of the Project in the present case required the Offset Management Plan to be prepared in accordance with the Offsets Policy and the Environmental Management Plan Guidelines: see condition 33(b).

154    The Offsets Policy (at p 15) refers to the level of certainty that a proposed offset will be successful, and notes “[i]n the case of uncertainty, such as using a previously untested conservation technique, a greater variety and/or quantity of offsets may be required to minimise risk”. Further, in assessing whether a proposed offset will deliver a conservation gain, consideration may be given to the time period until the benefit will be delivered and the level of “confidence in [the] result”: Offsets Policy, p 16.

155    Under the Offsets Policy, the risk that an offset strategy might not succeed in compensating for the impacts on the protected matter is relevant to an assessment of the suitability of the proposed offset, and may have a bearing on the scale or size of the offset required: Offsets Policy, pp 6 (Offset Principle 5), 21–22. A suitable offset should also be “scientifically robust and reasonable”: Offsets Policy, pp 6 (Offset Principle 7), 23. The Offsets Policy thereby contemplates that the precautionary principle should be incorporated in the assessment of the suitability of an offset: Offsets Policy, pp 6 (Offset Principle 9), 21–22. The application of the precautionary principle in such a context is arguably indirect, in so far as it involves a “risk based approach” in determining whether a threat of serious or irreversible environmental damage is adequately compensated by offsetting environmental benefits in relation to the relevant protected matter. More generally, the Offsets Policy recognises that the evaluation of a proposed action and offset proposal is ultimately at the discretion of the decision-maker: Offsets Policy, p 25.

156    The Offset Strategy was prepared in accordance with the Offsets Policy, incorporating a risk-based approach consistent with the precautionary principle. The assessment in the Offset Strategy was based on a level of “confidence in results” for habitat quality of 70%, although this figure was not specifically mentioned by the delegate in the Reasons. The Offset Strategy expressly contemplated procedures for monitoring, evaluation and review of the Project’s ecological outcomes, noting that the response to inundation of River Red Gum trees (comprising Regent Parrot breeding habitat) had been “extensively studied along the Murray River floodplains”.

157    In the present case, the delegate considered the proposed offsets under the Offset Strategy, noting that the outcomes would be regularly monitored, and referred to the requirement for the Proponent to submit an Offset Management Plan. In my view, the delegate’s process of reasoning in considering the proposed offsets was not irrational: compare, e.g., FOGC FC at [67]–[68] (Jackson and Kennett JJ).

Did the delegate adopt an “erroneous counterfactual” as to the future without the Project?

158    The applicant submitted that the delegate failed to consider whether the environmental benefits which offset the residual significant impact of the Project on the breeding habitat of the Regent Parrot were likely to have been achieved in any event under the Basin Plan, even without the Project. In such circumstances, the applicant argued that it was erroneous for the delegate to have attributed those benefits to the Project, in order to treat them as offsetting the impact of the destruction of critical habitat of the Regent Parrot.

159    Thus, the applicant submitted:

Had the delegate turned her mind to what was likely to occur without the Project, she could realistically have found that the implementation of the Basin Plan would, in any event, deliver increased inundation to the on-site offset area. If she had, she could not rationally have concluded that the on-site offset area represented benefits attributable to the Project and capable of justifying the destruction of other Regent Parrot habitat.

160    The applicant submitted that this “failure to take into account a proper counterfactual” gave rise to legal error on the basis that the delegate failed properly to consider the impacts of the controlled action, misunderstood the statutory task, or otherwise made an irrational or unreasonable decision.

161    The delegate found that a decision to approve the Project may provide environmental benefits by aiming to return more natural flows to the floodplain areas, and “that the intent of the proposed action is to improve the ecology of the floodplain environments and to improve the ecological function of the floodplains”: Reasons at [131], [137]. The delegate noted that alternatives to the Project had not been considered, agreeing with the SIAC report that such alternatives were “outside the scope of the assessment”: Reasons at [132], [134]. Nevertheless, the delegate acknowledged that public submissions had been made during the assessment process which “did highlight that the proposed action may not be the most effective way of achieving the project objectives, in relation to environmental, social and economic matters”: Reasons at [133]. The delegate noted the conclusion in the Victorian Minister’s report that there was “a reasonable expectation for overall biodiversity improvement and benefit in the long term from the proposed action”, although this was subject to some limitations in the Environment Report documentation and a recommendation that further analyses should be undertaken.

162    The applicant argued that the delegate had failed to consider any counterfactual in which the Project did not take place but alternative measures were taken in accordance with the obligations imposed under the Basin Plan. Although such a scenario had been addressed in the Offset Strategy, the applicant submitted that it was not open to infer that the delegate read the Offset Strategy or considered that particular scenario. Alternatively, the applicant submitted that the counterfactual set out in the Offset Strategy was not “legally appropriate” for the reasons set out below.

163    Section 4 of the Proponent’s Offset Strategy addressed the topic of “Environmental Watering”. In that context, five potential “operating scenarios” for the Project were developed under which environmental water would be delivered “at different frequencies and durations to meet the hydrological requirements of the relevant ecology present”, so as “to replicate inundation conditions within the Water Management Areas that would have occurred at various pre-regulation flow thresholds of the Murray River”.

164    The Offset Strategy included a table (Table 4) which demonstrated “how the inundation frequency and duration of the Ecological Water Regime Class has changed over time and how the project would better align inundation events with the ecological needs of the floodplain”, stating:

The information presented in Table 4 comprises:

•    The Ecological Water Regime Classes that have been identified at Nyah

•    The equivalent Murray River flow threshold as measured at Swan Hill Weir, indicating the equivalent level the Murray River would have had reach to get water to that specific Ecological Water Regime Class without the project

•    The previous, current and forecast watering regimes for each of the Ecological Water Regime Classes and the project’s watering objective, including the frequency and duration of inundation for each of the following water regimes:

•    Pre-regulation: the likely water regime before regulation of the Murray Darling Basin

•    Regulated river: the water regime the Ecological Water Regime Class would be experiencing, and would likely continue to experience, without the project or the Basin Plan (current condition, with river regulation) based on modelled flow scenarios at Swan Hill Weir over a 114-year period to 2009

•    ‘Basin Plan’ without VMFRP: the water regime that would be realised by implementing the Basin Plan (that is, diverting water for irrigation back into the Murray River), but without the project (that is, no infrastructure to deliver the additional water to the Ecological Water Regime Classes)

•    ‘Basin Plan with VMFRP’: the water regime that the project would achieve. It would provide a new supply measure, in addition to those already included in the benchmark assumptions under the Basin Plan and would ‘bridge the gap’ between the Basin Plan flows and the environmental water requirements of Nyah

•    The operating scenarios that can achieve the ‘Basin Plan with VMFRP’ objectives

•    How often watering events, in addition to the Basin Plan, will be delivered by the proposed project operating scenarios, subject to implementing adaptive management requirements.

(Emphasis added.)

165    Table 4 set out the “Nyah watering objectives” for each of the Ecological Water Regime Classes, including the frequency and duration of watering events for each of the watering regimes — namely, “Pre-regulation”, “Regulated river”, “Basin Plan”, and “Basin Plan with VMFRP” (i.e. including the Project). The frequency was expressed in terms of the number of “watering events” every 10 years, and the median duration of such watering events was expressed in terms of months. Table 4 specified the additional watering events delivered by the VMFRP (including the Project) for each of the Ecological Water Regime Classes, “[c]alculated as the difference between the Basin Plan and the Basin Plan with VMFRP”.

166    For present purposes, it is unnecessary to reproduce the precise figures set out in Table 4. In broad terms, the frequency and duration of watering events were higher under the Basin Plan with the Project than under the Basin Plan (without the Project), and the Project would deliver additional watering events. Nevertheless, flows under the Basin Plan (without the Project) were generally higher than the “Regulated river” in its current condition (without the Basin Plan or the Project). None of the regimes was equivalent to the frequency and duration of inundation of the Murray River in its “Pre-regulation” state.

167    The applicant sought to advance a detailed critique of the hydrological modelling that underpinned the analysis in Table 4, challenging its relevance to a future under the Basin Plan without the Project. In particular, the applicant contended that there had been no modelling of constraint measures under the Basin Plan (which involve the removal or easing of constraints on the capacity to deliver environmental water), and that the model was premised on an outdated water recovery target of 2,750 GL — i.e., without taking into account the increased target of 3,200 GL pursuant to the amendments which introduced s 85AC in December 2023. In relation to the latter, the applicant contended that the increased volume of water resources available for environmental use was directed at the pursuit of “enhanced environmental outcomes”, including by providing opportunities for environmental watering of additional floodplain areas in Basin States: Basin Plan, s 7.09(e) Note 1, Sch 5 item (2)(f). The applicant submitted that such outcomes were “the very kind of benefit that the Offset Strategy asserts is a benefit of the Project”.

168    Thus, the applicant relevantly submitted:

Table 4, insofar as it sought to represent the implementation of the Basin Plan without the Project, failed to factor in actions likely to be taken to implement the Basin Plan as at the date of the decision, including constraints relaxation projects and the increased recovery target of 3200GL/year. Even putting this aside, the fact the specific modelling (and assumptions relied upon in relation thereto) underpinning Table 4 is not identified or analysed in and of itself suggests a lack of rationality given the importance of the assumptions in Table 4 for the delegate’s ultimate decision – that the Offset Strategy justified destruction of critical habitat.

169    It goes without saying that the Court is not called upon to make findings as to the adequacy or appropriateness of the Offset Strategy, nor to revisit the factual merits of the delegate’s findings in relation to the impacts and consequences of the Project. The questions arising on judicial review are whether the delegate fell into legal error by misconceiving the statutory task, asking the wrong question, or reaching irrational conclusions that were not legally open on the material before the delegate.

170    A central premise of the applicant’s argument is that, in order to “isolate” the impacts of the Project, it was necessary for the delegate to turn her mind to the counterfactual scenario (or scenarios) in which the Project did not take place, which in turn demanded consideration of the circumstances in which the Basin Plan would be implemented by alternative projects or measures that might deliver similar environmental benefits.

171    Under s 527E of the EPBC Act, the “impacts” of an action are its direct consequences, and any indirect consequences that are substantially caused by the action. As Jessup J observed in Tarkine (at [41]), “[a]n obligation to take a consequence into account necessarily implies an existing situation, or base line, against which the result or effect occurs”. In most cases, this base line will be “constituted by the existing circumstances” at the time of the proposed action: Tarkine at [41]. It is unnecessary for such purposes “to take account of the consequences of any other action, present or anticipated”, that might potentially have some consequences for a matter protected by a controlling provision in Part 3 of the EPBC Act: Tarkine at [41]. The base line will be the circumstances as they exist unaffected by the proposed action, and the impacts will be the consequences of the proposed action on those existing circumstances. Accordingly, in determining the impacts of a proposed action, the decision-maker is not required to predict or hypothesise what might happen in the future if the proposed action does not take place, as a result of other actions or events or circumstances: see Environment Council of Central Queensland Inc v Minister for the Environment and Water (2024) 304 FCR 91 (ECCQ) at [175] (Horan J).

172    The issue in the present case arises in a slightly different context to that considered in Tarkine and ECCQ, which were concerned with whether the Minister was required to consider the “cumulative impacts” of a proposed action in conjunction with other actions that were known or reasonably anticipated to occur in the future, rather than looking only at the consequences of the proposed action “in isolation”: see Tarkine at [40]. In the present case, the applicant argued that, in order properly to isolate the impacts of the Project, it was necessary to take into account the extant obligations under the Basin Plan which would require the water recovery targets to be met by some other means. Nevertheless, the particular measures or projects that might be undertaken as an alternative to the Project, and their effects or impacts in relation to the Project area (including the on-site offset area), remained a matter of speculation. The applicant did not point to any information before the delegate which identified any such measures or projects, let alone their effects or impacts.

173    It might also be relevant that these issues were addressed by the delegate in the context of a decision whether to grant an approval under s 133 of the EPBC Act, and in relation to an assessment of environmental benefits that were relied upon to offset the impacts of the Project on a matter protected by a controlling provision. In contrast to a decision under s 75 of the EPBC Act whether a proposed action is a controlled action, where the Minister is required to consider all adverse impacts of the proposed action but must not consider any beneficial impacts (s 75(2)), a decision under s 133 whether to approve the taking of a controlled action may consider all matters relevant to the matter protected by the controlling provision together with economic and social matters, and must take into account the assessment documentation and any other information on the relevant impacts of the action: s 136(1)–(2). In the present case, the Offset Strategy contained information on the relevant impacts of the Project that could be taken into account by the delegate, both as to matters relevant to the impact on listed threatened species (including the Regent Parrot), and economic and social matters.

174    Part 9 of the EPBC Act contains a “detailed and prescriptive” statutory framework governing the making of a decision whether to approve a controlled action: Tarkine at [20] (Jessup J). Among other things, the role of the Minister or delegate is to take into account the information and material before him or her, and not “to undertake additional research or investigations”: Tarkine at [27] (Jessup J). There was no information or material before the delegate in the present case about any other specific alternative projects or measures that might be taken if the Project did not proceed. The delegate’s task was to consider whether to approve the action comprising the Project, and what conditions should be attached to any such approval for protecting, repairing or mitigating damage to a matter protected by a controlling provision (whether or not caused by the Project).

175    The delegate was aware that the Project, as part of the larger VMFRP, was a SDLAM project under the Basin Plan. The environmental watering of the offset area was capable of being regarded as a direct consequence of the construction and operation of the Project, and the ecological benefits from additional watering events could be regarded either as direct consequences or as indirect consequences of which the Project will be a substantial cause. As such, it was open to the delegate to have regard to those impacts or benefits for the purposes of offsetting the residual significant impacts on the Regent Parrot, and as matters relevant to matters protected by ss 18 and 18A of the EPBC Act. For such purposes, it was unnecessary for the delegate to compare the direct and indirect consequences of the Project with other hypothetical measures that might instead be carried out in order to implement the Basin Plan and, in any event, there was no material before the delegate that would have enabled her to conduct any such exercise.

176    In so far as it is relevant, I would infer that the delegate considered the Offset Strategy when making the approval decision. The Reasons expressly referred to and summarised key aspects of the Offset Strategy: Reasons at [45]–[51]. Further, the Offset Strategy was included as an attachment to the Proposed Approval Brief, which the delegate indicated that she had considered. The Offset Strategy relevantly addressed and modelled the “previous, current and forecast watering regimes”, including under the Basin Plan without the VMFRP. The information in the Offset Strategy was consistent with a conclusion that the Project would provide additional environmental watering through improved inundation patterns, which was likely to lead to improvements in the breeding habitat of the Regent Parrot in the inundation areas. For such purposes, the EPBC Act did not require the delegate to consider s 85AC of the Water Act nor whether any increase in the volume of water available for environmental use might affect the methodology or conclusions set out in the Offset Strategy.

177    Accordingly, the delegate’s findings on the impacts and benefits that were attributable to the Project were open on the information before her, and did not involve any legal error.

CONCLUSION

178    It follows that the applicant has not established any of the grounds set out in the amended originating application for judicial review. The application is therefore dismissed. The parties will be invited to make submissions on costs.

Associate:

Dated:    12 May 2026