Regulation impact statement

Outcomes from Public Consultation

The desired outcomes by the Australian Government remain unchanged after public consultation; they are:

• 
  to improve water quality in the Marine Park;
  
• 
  to increase protection and conservation of the plants and animals of the Marine Park, including protected species; and therefore,
  
• 
  to improve the Great Barrier Reef’s overall World Heritage values, as well as
  
• 
  to give certainty to future project proponents about capital dredge spoil disposal in the Marine Park
  

Final proposal

As a result of public consultation, the final policy intent has remained unchanged in that all future disposals into the Great Barrier Reef Marine Park of capital dredge spoil material should be banned from the date the regulation comes into effect (and include permissions that have already been granted for uncontained disposal). This means that no further disposal of capital dredge spoil material will occur in the Marine Park from the date the regulation comes into effect. Box 2 sets out the proposed content of the regulation to give effect to this proposal.

This proposal represents the highest likely net benefit (as described below) to the Great Barrier Reef ecosystem and the highest certainty for achieving the Government’s desired outcomes.

Box 2: Proposed content of the relevant regulation The regulation will provide that the Authority must not grant a permission for conduct that includes dumping of capital dredge spoil material in the Great Barrier Reef Marine Park; the ban apply to existing permissions for conduct that includes uncontained disposal of capital dredge spoil material in the Great Barrier Reef Marine Park where they have not yet expired; the definition of capital dredge spoil material will not include amounts from very small scale dredging programs (less than 15,000 cubic metres), for example, those associated with an approach to a small boat ramp, or material excavated for the purposes of maintaining an existing channel, basin, port, berth or other area for its intended use or for the protection of human life or property; and the definition of dumping will not include the burying of a cable, pipeline or tunnel for the purposes of infrastructure, for example, those for water, telecommunications or electricity.

Net benefits

This final proposal safeguards the inshore northern third of the Marine Park (which is in good and very good condition) into the future from the potential impacts of disposing of capital dredge spoil material.

Together with other actions from Commonwealth, Queensland and local governments, industries and the community, this proposal is a valuable step to halt and reverse any possible local impacts on the health and condition of the central and southern inshore waters of the Marine Park, particularly water quality. The primary activity in the improvement of water quality directly is through the reduction of sediments.

Ecosystem services are the contributions of ecosystems to benefits used in economic and other human activity. Recently the Australian Bureau of Statistics released an information paper presenting an experimental ecosystem account for the Great Barrier Reef. ³⁹ Three main types of ecosystem services are described in the paper: provisioning services, regulating services and cultural services; and four main determinants and constituents of well-being: security, basic material for a good life, health and good social relations.

The Great Barrier Reef Region Strategic Assessment Report clearly demonstrated that the condition and trend of the Great Barrier Reef’s community benefits⁴⁰ are determined, in large part, by the quality of the environment (its biodiversity, geomorphological features and Indigenous and historic heritage values) from which the benefits are derived. Many catchment residents understand and appreciate the Reef and have a strong personal attachment to it. Much of the natural beauty of the Reef remains, but underwater aesthetic values have declined in some areas. Reef-dependent industries contribute strongly to the Australian economy.

Therefore, improvements in ecosystem condition, health and resilience in the Great Barrier Reef will benefit individuals, community groups (such as recreational boating clubs), and businesses (including tourism, commercial and charter fishing) that rely on a healthy and resilient ecosystem for a range of community benefits and services derived from the ecosystem.

Impact on businesses

The proposed regulation will directly affect businesses that undertake projects that intend to dispose of capital dredge spoil in volumes greater than 15,000 cubic metres in the Marine Park. Such capital dredging campaigns occur infrequently, are generally of longer duration (weeks to months/years), and generally remove seabed material with a wide range of particle sizes (gravel, sands, silts and clays).

This regulation would mostly affect Queensland Government – owned businesses that manage large ports (e.g. Queensland Ports Corporations) and hence tend to undertake the dredging on behalf of their clients using terminals at the ports.

This proposal will provide consistency in government decision making when considering the disposal of capital dredge spoil material in the Marine Park. This consistency should lead to greater certainty for businesses in the regulatory approval process and should assist businesses to develop and adapt their planning requirements into the future.

This proposal also means that lengthy and costly court cases resulting from third parties (usually environmental non-governmental organisations) appealing decisions made by GBRMPA may not occur, although it should be noted that approvals for disposal outside the Marine Park are still subject to appeal rights under legislation other than the Great Barrier Reef Marine Park Act.

The Reef 2050 Long-Term Sustainability Plan highlights the Australian Government’s intention to permanently ban the disposal of capital dredge material in the Marine Park. It also highlights several Queensland Government commitments relevant to this RIS including the following actions:

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  Protect greenfield areas by restricting new port development in and adjoining the Great Barrier Reef World Heritage Area to within current port limits.
  
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  Restrict capital dredging for the development of new or expansion of existing port facilities to within the regulated port limits of Gladstone, Hay Point/Mackay, Abbot Point and Townsville;
  
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  Ensure that any new development inside these port limits is also consistent with the Great Barrier Reef Marine Park Act, the Queensland Marine Parks Act, their regulations and zoning plans;
  
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  Prohibit the sea-based disposal of material into the Great Barrier Reef World Heritage Area generated by port-related capital dredging;
  
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  Mandate the beneficial reuse of port-related capital dredge spoil, such as land reclamation in port development areas, or disposal on land where it is environmentally safe to do so.;
  
• 
  Require all proponents of new dredging works to demonstrate their project is commercially viable;
  
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  Support on-land disposal or land reclamation for capital dredge material at Abbot Point.
  

By removing the ability for GBRMPA to grant permission for the dumping of capital dredge spoil material, those businesses that rely on a healthy and intact ecosystem should benefit from the proposed regulation. This includes principally the commercial marine tourism industry and the commercial fishing industry.

The Great Barrier Reef supports significant commercial and non-commercial uses, especially commercial marine tourism and fishing. It is estimated that, in 2011–12, the Great Barrier Reef contributed approximately $5.6 billion⁴¹ to the Australian economy (primarily from tourism) and supported employment equivalent to about 70,000 full-time positions.

Commercial marine tourism continues to be the most significant Reef-dependent use — both in terms of economic value and employment. A reduction in Great Barrier Reef-related tourism would have significant negative effects on regional tourism in Queensland, which is estimated to be worth $5.2 billion⁴² to the Australia economy. This would result in a reduction in earnings for local businesses that directly and indirectly service the tourism industry. In turn this could lead to increased unemployment in regional areas of Queensland.

The long-term attractiveness of the Great Barrier Reef as a tourism destination is largely based on the area’s reputation as the world's largest and best known coral reef ecosystem — one that has spectacular and iconic species (whales, marine turtles, sharks, seabirds) — combined with high standard tourism and protected area management. Swimming, snorkelling, scuba diving and viewing animals are consistently popular tourist activities. The industry relies on the Great Barrier Reef retaining the characteristics and Outstanding Universal Value that make it a matter of national environmental significance and a world heritage property.

Commercial fisheries have been operating in the Great Barrier Reef for many decades and have played an important role in the development of regional Queensland. Fisheries product continues to be important to local communities, as well as domestic and international markets. A very high proportion (around 90 per cent) of the Queensland coastal population consumes fresh seafood. In a 2008 survey⁴³, many consumers reported they preferred Queensland, wild-caught species, despite it being more expensive than imported seafood products, and many believed it would benefit their community and the Australian economy. Fisheries within the Great Barrier Reef continue to contribute a major component of Queensland’s total seafood catch. In 2012 it represented about 52, 80, 21 and 30 per cent of Queensland’s retained catch in the trawl, line, net and pot fisheries, respectively. In 2011–12 the economic contribution of the Reef’s commercial fishing and aquaculture industries and its adjacent catchment to the national economy was estimated to be $160.3 million⁴⁴.

However it is unlikely the commercial marine tourism and fishing industries will collapse everywhere on the Great Barrier Reef if this proposal does not proceed. Effects may occur regionally in the vicinity of the areas where capital dredge spoil material is disposed. Nevertheless, because of the uncertainty in the long-term and sub-lethal effects of dumping capital dredge spoil material in the Marine Park, GBRMPA has considered that the risk to local and regional businesses from this proposal not proceeding would have significant reputational damage to the Australian Government in relation to the World Heritage listing of the Great Barrier Reef.

Impact on community groups

The proposed regulation should not negatively impact community groups as the community does not undertake major projects that result in the need to dispose of capital dredge spoil in volumes greater than 15,000 cubic metres. Rather, the proposed regulation should positively impact community groups and scientific organisations as they are generally in support of increasing the protection of the marine environment within the Marine Park.

There should be no impact on community groups that enjoy recreational boating or even for the international yachting community that requires marinas for berthing while visiting Australia. The ability to cater for new small vessel boat ramps has been retained in the proposal.

Impact on individuals

The proposed regulation also should not negatively impact individuals. The ability to build new boat ramps has been retained and should be able to cater for the projected population growth for the Great Barrier Reef catchment into the foreseeable future. Over the next 20 years, much of the Great Barrier Reef catchment is forecast to experience annual population growth of 1.6 per cent or higher, particularly in the southern half of the catchment. In comparison, the national rate of population growth is projected to slow, but remain above one per cent per annum over the next 20 to 40 years.

The number of recreational visits from residents in the catchment continues to increase, most likely as a result of three factors: population growth, an increase in the proportion of the population visiting the Reef and a rise in the average number of visits each person makes. It is estimated that 87 per cent of residents in coastal towns adjacent to the Reef have visited the area for recreation. The majority of coastal town residents feel there is no better place to undertake the recreation activities they enjoy than the Great Barrier Reef. There has been a steady increase in vessel registrations over the past few decades (Figure 2) which is likely to have translated into more recreational vessel trips in the Reef.

Figure . Number of recreational vessels registered in the catchment, 1987–2013

The number of vessels registered in areas close to the Great Barrier Reef has continued to increase. Source: Department of Transport and Main Roads (Qld)

People living adjacent to the Great Barrier Reef, as well as domestic and international visitors, use the area for a wide range of recreational activities, including fishing, snorkelling, diving, swimming, boating, beach and island walking, sightseeing, relaxing and socialising. For residents of the catchment, going to the beach, fishing and boating were the most popular activities in 2013 (Figure 3).



Figure . Main activities of catchment residents in the Great Barrier Reef, 2013

The graph shows the percentage of residents surveyed who undertake each type of activity more than once a year. Going to the beach was the most popular activity for residents, followed by fishing and boating.

Estimates of regulatory burden associated with the preferred option

Under the Australian Government’s Regulatory Burden Measurement Framework, the costs borne by those affected by the regulation over a ten-year period must be measured and presented as an annual cost so that offsets can be identified. This Framework calculates the likely regulatory burden of the proposed measure on stakeholders identified as businesses, individuals and not-for-profit organisations.

Affected stakeholders

As the regulation will prohibit the disposal of capital dredge spoil material in the Marine Park, only businesses undertaking capital dredging activities are likely to incur regulatory burden costs. Community groups and individuals are unlikely to make an application for such permission.

To determine the number of businesses that are likely to be affected, GBRMPA has identified any potential project proponents that could seek to dispose of capital dredge spoil material in the Marine Park over the next ten years. This information was based on informal discussions with proponents and knowledge of existing approved capital dredging in or adjacent to the Marine Park for which no disposal grounds had yet been approved. Given the time taken to plan these developments, GBRMPA considers it would be aware of all developments requiring capital dredge spoil dumping in the next ten years. Based on the information gathered, GBRMPA has identified four projects and businesses⁴⁵ that could potentially be affected by changes to government dredge spoil dumping policy (Table 3).

Subsequent to the initial announcement of the proposed regulation, announcements by the Queensland Government have meant that two of the four potential projects identified in Table 3 will no longer be affected by the Commonwealth’s proposal:

Table . Projects that may be affected by changes to Government dredge spoil dumping policy from 2015 to 2025.

Dredging project/business name	Estimated amount of capital dredge material (cubic metres) requiring disposal to 2025
Gladstone Ports Corporation Limited –Western Basin EPBC 2009-4904	21 million
Abbot Point - North Queensland Bulk Ports Corporation –existing Marine Park permission G14/34897.1	1.7 million ^46
Cairns shipping development project - Far North Queensland Ports Corporation Limited -– existing Marine Park application G35667.1/ EPBC 2012-6538	4.4 million^47
Dudgeon Point^48 - North Queensland Bulk Ports Corporation	May be up to 4 million (based on informal discussions). No current application or approval/permits.

On 11 March 2015, the Queensland Premier, the Hon Anastacia Palaszczuk, and the Minister for State Development and Natural Resources and Mines, the Hon Anthony Lynham, announced that the Queensland Government and the major proponents (government business enterprises) of the Abbot Point project had reached an agreement that “would see dredge spoil dumped on land on the site known as T2, [...] not [...] within the Great Barrier Reef World Heritage Area.”⁴⁹ This statement means that the Abbot Point project is unaffected by the Commonwealth’s proposed regulations, as it would not otherwise have been dumping dredge spoil in the Marine Park, which is wholly encompassed by the World Heritage Area.

On 18 April 2015, the Queensland Treasurer, the Hon Curtis Pitt, announced that the Cairns shipping development would not progress.⁵⁰ This followed the release of a draft Environmental Impact Statement (EIS) that included a preferred option to dump dredge spoil in the Great Barrier Reef Marine Park and World Heritage Area.⁵¹ Following the release of the EIS, the Queensland Government considered the project to be “environmentally and economically unsustainable”.⁵² Therefore, this project will not proceed as outlined in its current application.

As only two potential projects, Gladstone and Dudgeon Point, remain liable to be affected over the next ten years by the Commonwealth Government’s proposal to ban capital dredge spoil material dumping in the Marine Park, costing of regulatory burden has focussed solely on these two projects. The timings associated with these two projects are subject to factors external to GBRMPA’s control, as highlighted in the section ‘Addressing uncertainty’ above. However, GBRMPA has conservatively estimated the following timeframes for the two known projects affected by this proposal:

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  According to its website, the Gladstone-based Western Basin project is continuing to progress,⁵³ however disposal plans for Stages 2, 3, and 4 have yet to be developed and approved by relevant environmental regulators⁵⁴. A December 2014 community project update stated that: ”Based on current and predicted shipping demand over the next five years from existing and soon to be completed industries within the Gladstone region, there is no immediate requirement for any physical capital dredging to take place’⁵⁵.
  
• 
  With the withdrawal of the Dudgeon Point application (EPBC 2014/6240) on 4 December 2014 and given that no further application has been lodged at the time this RIS was written, the timing of any future proposals to dispose of capital dredge spoil material is unknown. However, given the fluctuations in global drivers for coal from Australia, GBRMPA believes an application for the expansion of Dudgeon Point will be received during the ten year timeframe associated with the costings required for this RIS. In their June 2014 media statement⁵⁶, North Queensland Bulk Ports Corporation stated that it was their intention to “complete a port master planning exercise over the coming year to comply with the proposed Queensland Ports Strategy and to then revisit the scope of the Dudgeon Point project”.
  

Regulatory costs to business

In the absence of either Queensland or Commonwealth Government policies that place limitations on the location of dredge spoil disposal, project proponents could theoretically have considered disposal in one (or a combination of) the following four sites:

1. 
   Land disposal;
   
2. 
   Ocean disposal - within the Great Barrier Reef Marine Park;
   
3. 
   Ocean disposal - within the exclusion areas inshore of the Marine Park; and
   
4. 
   Ocean disposal - seaward of the Marine Park.
   

Following implementation of the proposed regulation, any businesses seeking to undertake capital dredging activities will need to design their development so that disposal of dredge spoil occurs in alternate sites outside of the Marine Park.

GBRMPA acknowledges that under the Reef 2050 Long-Term Sustainability Plan (page 26) the Queensland Government has committed to prohibiting the sea-based disposal of material into the Great Barrier Reef World Heritage Area generated by port-related capital dredging⁵⁷. The Queensland Government will also mandate the beneficial re-use of port-related capital dredge spoil, such as land reclamation in port development areas or disposal on land, where it is environmentally safe to do so. The 11 March announcement concerning the land disposal of Abbot Point dredge spoil is consistent with this position.

After the Marine Park regulation is enacted and Queensland fulfils its commitments as outlined in the Reef 2050 Long-Term Sustainability Plan and as announced in recent weeks, potential dumping sites for capital dredge spoil material will be reduced to:

1. 
   Land disposal; and
   
2. 
   Ocean disposal - seaward of the Marine Park.
   

It should be noted that these options represent the likely avenues a proponent might explore after the Queensland Government’s stated policies, and this regulation, take effect. By including them in this analysis, GBRMPA is not making any implication or judgement on their likelihood of approval by either the Australian or Queensland Governments.

Calculation of regulatory burden

The 2013 report on Improved Dredge Material Management for the Great Barrier Reef Region provided information on the potential costs of options other than sea disposal and assisted in the preparation of the regulatory burden costings. The method used to prepare that report was also informed by discussions with the relevant port authorities mentioned in that report. Only one submission to the March consultation process included information (refer ‘Other’ section in the summary of public consultations above), drawn from several published reports, on the relative costs of dumping of dredge spoil on land and at sea for various proposals. This information was difficult to reconcile with the information in the SKM report.

The regulatory burden costs of the proposed regulation arise primarily from any increase in financial costs per cubic metre to businesses due to disposing of capital dredge spoil in sites outside the Marine Park. These costs would comprise:

those expenses associated with the hire/lease/purchase of capital equipment and other costs incurred in the collection/preparation/processing of capital dredge spoil to ready it for transport, (which may be more significant when the alternate disposal site is land-based – see below); and

the variable transport-related costs that depend on the distance the dredge material will travel to get to the alternate disposal site. This cost increases slightly as the distance increases (for example, the cost attributable to a distance of 20 kilometres and 40 kilometres from dredge site to disposal site is $4.50 and $4.88 per cubic metre respectively)⁵⁸.

The disposal costs vary greatly depending on whether disposal occurs on land or for beneficial re-use at sea. Disposal on land has additional costs associated with activities such as de-watering, stabilisation and land reclamation/habitat restoration. However, as the cost per cubic metre associated with the distance travelled from the dredge site to the disposal site increased with distance, these variable distance-related costs became relatively more significant.

In cases where spoil is disposed of on land but is used for land reclamation (or other beneficial uses), the economic benefits may help reduce the net cost of disposal on land, compared to cases where it is just dumped and not re-used in any way.

The regulatory burden of the proposed regulation was calculated by determining the difference in the cost of capital dredge spoil disposal under the existing regulatory environment (Status Quo) and with the proposed regulation (see Table 4). The annual change in regulatory burden is the sum of the additional costs imposed on these stakeholders in an average year. This was calculated by determining the change in disposal costs per cubic metre of dredge spoil in the Marine Park, assuming spoil was instead disposed of in differing proportions in the other potential sites.

In indicative costings, the overall cost impact of the final regulation on affected businesses has been calculated as $42.49 million (Table 4). In accordance with the Regulatory Burden Measurement Framework, these costs were divided by ten to give an average annual burden cost estimate of $4.249 million over the next ten years (from 2015 to 2025). The Office of Best Practice Regulation has agreed to this costing. The increased costs of the Marine Park regulation for the Gladstone and Dudgeon Point projects have been fully offset by the Australian Government from savings associated from the National Offshore Petroleum Safety and Environmental Management Authority reform.

Table . Indicative average annual regulatory cost impact of the proposed regulation on affected businesses. ⁵⁹

Change in costs ($m)	Business	Community organisations	Individuals	Total change in costs
Total, by sector	$4.249	$0	$0	$4.249
Department of the Environment	-$4.249	$0	$0	-$4.249
Total (Change in costs + Cost offset) ($ million) = $0