We reiterate our earlier advice that if the Nature Repair Market is to be used as an offsets market – a position which we continue to oppose – then there should be a delay of offsets being included for at least 5 years to allow market design and integrity the chance to fully resolve first.
However, given that the Commonwealth is proceeding with introducing offsets into the Nature Repair Market prior to allowing it to properly establish we provide key recommendations, with further detail (including additional, more technical recommendations) provided in the body of our submission:
- Need for a robust offset integration framework (Issues Paper 1): The critical requirement when introducing offsets into the Nature Repair Market will be ensuring that the overarching framework design and associated systems and processes are robust, provide integrity, and minimise complexity. This includes, for example, transparent reporting and accounting processes are established to ensure that offsets generated under the Nature Repair Market are kept separate from non-offset Nature Repair Market projects; and that inter-agency communication and feedback loops are integrated appropriately.
- Early review of offset operation (Issues Paper 1): An early review is undertaken of the Nature Repair Market-offset system and its operation, for example, after the first two years of offsets being ‘live’ in the market. This should include not just whether the offsets program is working effectively, but also its interaction with broader market integrity and participation.
- Appropriate security of offsets (Issues Paper 1): Further consideration of the Commitment to Protection (CtP) variable Biodiversity Project Characteristic (characteristic) in terms of opportunities to leverage the data required under the CtP characteristic for the purposes of assessing security considerations for offsets.
- Limiting discretion in the Threatened Species characteristic (Issues Paper 2): Additional detail be made available regarding the ‘guardrails’ that will be applied either within the details of the Threatened Species characteristic or by methods to limit the discretion of the SQP in undertaking the decisions relating to indicators, thresholds, and counterfactuals (e.g., minimum standard threshold values). These guardrails must go beyond reliance on the qualifications and experience of the SQP and will need to be carefully developed to minimise the risks raised here while avoiding unnecessary complexity.
- Improving the ‘high confidence pathway’ for Threatened Species characteristic (Issues Paper 2): That the ‘high confidence pathway’ definition and requirements would benefit from several adjustments to avoid perverse outcomes and improve confidence and clarity in outcomes and manage conflict/complexity arising around state-federal species listings and offset programs.
- Further consideration of the operationalisation implications of the assessment of significant reversals (Issues Paper 3): The approach for significant reversals is based on consideration of the impact on the indicators for the applicable characteristics seems broadly appropriate, however, further consideration around the specific implementation of this and amendment of the details of the circumstances may be of benefit.
- Clarifying the requirement for project contributions to be declared (Issues Paper 3): While supportive of transparency around financial or in-kind contributions to projects to allow informed consideration and decisions by contributors and buyers, the rationale for including the rule should be clarified and caution should be taken around registry scope creep, inadvertent reduction in investment in this space, and resolution of the significant ambiguity in the draft rule.
