A review of some of the areas chosen for nature restoration as part of Australia’s biodiversity offset system has found a third are in worse condition than before, prompting fresh warnings that the scheme is increasing the risk of animals and plants going extinct.
In one instance, the majority of a site that should have provided grey-headed flying fox and koala habitat was found to be “cleared paddock with negligible foraging value”.
Two other sites were found to have land that overlapped with other existing offset sites.
The federal environment department commissioned the review of 20 offset sites – 10 in south-west and central Victoria and 10 in south-east Queensland – to “ground truth” whether developer offsets were meeting their aims of protecting and improving threatened species habitat.
Biodiversity offsetting is a policy used around Australia. The system allows developers to compensate for the environmental damage they cause in one area by pledging work to deliver an equivalent or greater benefit in another.
The review, published last Friday, found that 55% of the sites examined had maintained the environmental conditions documented in the developer’s original offset management plan and other associated reports.
But in 30% – six out of the 20 sites – the conditions were worse.
The report found “major inconsistencies” at a quarter of the sites between the actual amount of threatened species habitat or threatened ecosystem at the location and what was pledged in the offset management plan. A further 30% had “minor inconsistencies”.
Conservationists said the report was the latest evidence of a “fundamentally flawed” offset system and renewed calls for the government to overhaul it.
Martine Lappan, an Australian Conservation Foundation investigator, said the system was allowing places and species to be “continually chipped away at until there is nothing left”.
“Australia’s system of biodiversity offsets needs a complete overhaul as part of the reform of the national nature law,” she said. “This report demonstrates that the conservation goals of offsets are a long way from the reality of what is happening on the ground.
“It shows offsets are not nature-positive and cannot be banked on.”
James Trezise, the director of the Biodiversity Council, praised the department for its assessment, saying it showed that offsets often “don’t even protect the extent of threatened habitats that proponents claim they will”.
“We can’t offset our way out of the extinction crisis,” he said. “Offsets need to be truly relegated to a measure of last resort.”
The report is likely to renew pressure on the Albanese government to rewrite the country’s nature laws. Parliament is debating legislation to create an environment protection agency but the government has been criticised for delaying a broader overhaul.
In 2021 a Guardian Australia investigation uncovered significant problems in the offsets system. A report released in May by the Australian Conservation Foundation identified multiple failures in the scheme.
A 2020 review of Australia’s environment laws by the former competition watchdog head Graeme Samuel found Australia’s offsets system was leading to net losses for the environment and called for immediate changes.
A review of New South Wales environment laws last year led by the former Treasury secretary Ken Henry was scathing of the state’s offset scheme, echoing multiple other reviews that were triggered by Guardian Australia reporting.
In May the Albanese government released the results of a desktop audit of 222 projects using offsets that found one in seven had either clearly or potentially not complied with their approval conditions.
The environment minister, Tanya Plibersek, said the ground-truth assessment of 20 offset sites was another part of that audit and her department had taken compliance action against developers of 21 projects.
“I commissioned this audit because I was concerned about offsets,” she said. “If people make a promise to protect nature, we expect them to keep it. If they don’t, there should be consequences.”
She said the proposed EPA would have powers to audit operations without notice, including whether developers and businesses were complying with their obligations.
“As we said in our nature-positive plan, we know the current offset arrangements are broken and making nature worse,” she said.
