Audit objective and criteria

The objective of this audit was to assess the effectiveness of the Great Barrier Reef Marine Park Authority’s regulation of permits and approvals within the Great Barrier Reef Marine Park.

To form a conclusion against this objective, the ANAO adopted the following high-level criteria:

• an effective process to assess permit applications and attach enforceable conditions has been established;
• a structured risk management framework to assess and manage compliance risks has been implemented;
• an effective risk-based compliance program to communicate regulatory requirements and to monitor compliance with permit conditions and regulatory objectives has been implemented; and
• arrangements to manage non-compliance are effective.

The ANAO examined GBRMPA’s assessment of Marine Park permit applications, monitoring of permit holders’ compliance and response to permit holders’ non-compliance. The ANAO did not examine GBRMPA’s other regulatory activities, such as the FMCU’s investigation and enforcement activities associated with: activities not subject to a permit; the state marine park; or permits and licenses granted under state legislation.

Overall conclusion

GBRMPA assesses approximately 400 permit applications each year and, at any one time, GBRMPA and its partner agencies under the Joint Field Management Program are responsible for monitoring the compliance of approximately 1300 permit holders with their permit conditions and taking appropriate enforcement action in response to identified non-compliance. Over the period July 2012 to June 2014, GBRMPA assessed 76 reported breaches of Marine Park permit conditions (approximately five per cent of all recorded breach incidents) and conducted 59 investigations.

In relation to the regulation of permits, identified shortcomings in GBRMPA’s regulatory processes and, more particularly, its regulatory practices have undermined the effectiveness of the permitting system as a means of managing risks to the Marine Park. These shortcomings were identified across a broad range of GBRMPA’s regulatory activities, including its assessment of permit applications, monitoring of permit holder compliance and response to non-compliance.

While GBRMPA has well-established arrangements for processing and assessing permit applications, there were weaknesses in the quality and completeness of the assessments undertaken against regulatory requirements. The causes of these weaknesses included fragmented and incomplete guidance material for staff, incomplete records, insufficient consideration of relevant assessment requirements and limited assurance from quality control processes. As a consequence, the permit application assessment reports prepared for the delegate did not address all regulatory requirements on which decisions to issue or refuse permits were to be based. Delegates did, however, generally document their decisions to issue or refuse permits in an appropriate manner, including the reasons underpinning the decisions, after considering the permit application assessment reports and proposed conditions to be attached to issued permits. These conditions, which are the primary means by which GBRMPA mitigates the risks posed to the reef by proposed activities, generally addressed many of the high or medium-rated risks identified during the assessment process. GBRMPA should, however, periodically review the design of standard permit conditions that it applies to common permit types to help ensure that they effectively address significant risks to the Marine Park.

In general, permit monitoring undertaken collectively by GBRMPA and its partner agencies has been insufficient to determine permit holders’ compliance with permit conditions. Specifically, GBRMPA was not effectively monitoring the timely receipt of most post-approval reporting documentation that permit holders were required to submit under their permit conditions, nor appropriately documenting its assessment/approval of the post‑approval reports submitted. While intelligence and risk-based field compliance operations (primarily vessel, aerial and land-based patrols) undertaken by GBRMPA and its partners agencies are effective in detecting some forms of permit-related non-compliance, they are not well-suited to detecting other forms of non-compliance (such as the condition of sub-surface infrastructure). The limited additional monitoring of permit compliance that has been undertaken by GBRMPA to supplement existing patrols (including site inspections), was not, however, informed by an appropriate risk-based approach. The failure to effectively monitor permit holder reporting requirements and to undertake sufficient risk-based supplementary monitoring activities reduces the effectiveness of permit conditions as a means of managing risks to the Marine Park from permitted activities.

Until recently, many instances of permit holder non-compliance (mostly related to the provision of required documentation) were not identified by GBRMPA staff and not recorded centrally for assessment and possible enforcement action. These shortcomings in recording permit non‑compliance have adversely impacted on GBRMPA’s ability to develop an informed view of the extent of permit non-compliance and address areas of non‑compliance in a timely manner. The limited guidance for investigators when determining appropriate enforcement responses to non-compliance, when coupled with poorly documented reasons for enforcement actions, also makes it difficult for GBRMPA to demonstrate the basis for its enforcement decision-making.

GBRMPA has acknowledged weaknesses in its permit assessment and compliance management processes and practices and has commenced work on a number of initiatives to strengthen existing arrangements. As part of this work, a high-level risk assessment of permitted activities in the Marine Park, which was prepared by GBRMPA in late 2014, indicated that existing controls (primarily permit conditions, deeds and bonds, intelligence gathering and analysis, patrols, and other monitoring activities) are generally insufficient to detect non-compliance with permit conditions. GBRMPA informed the ANAO that the permit compliance management plan, currently under development, will outline strategies to better address risks to the Marine Park environment from permitted activities and permit holders.

To improve GBRMPA’s regulation of Marine Park permits and to inform the work being undertaken to enhance compliance management practices, the ANAO has made five recommendations to strengthen the: processing of permit applications; rigour of the permit application assessment and decision-making processes; effectiveness of permit conditions; effectiveness of permit compliance monitoring; and response to instances of non-compliance.