PNG regulators guard the environment

The establishment of the Conservation and Environment Protection Authority (CEPA) will see significant changes in the ways applicants for, and holders of, environment permits interface with the environmental regulator. CEPA was established under the Conservation and Environment Protection Act 2014 (CEPA Act) and takes over the role formerly undertaken by the Department of Environment and Conservation as PNG’s environmental regulator. The head of the authority is the managing director who is broadly equivalent to the head of a government department. The managing director reports to a board. The minister, and through him the government, retains control over all policy matters and directs the managing director in this regard. The board exercises its powers under the act and the regulations, but also has power to make administrative orders to govern the internal affairs of CEPA, such as staff and financial matters. These administrative orders have legal force and will be used to provide for detailed rules regulating aspects of CEPA’s operations.

More Efficiency 

The basic regulatory framework remains largely unchanged but the establishment of a self-funded regulator should see the administration of applications for, and enforcement of, existing permits made more efficient. With the workload of the regulator varying significantly depending on the number and, more particularly, the scale and complexity of new applications, the government has had significant practical challenges anticipating funding needs year by year. CEPA will be self-funded, with the legislation providing for environmental management fees of varying kinds.

The details of the fees will be set out in the regulations but are required to comply with the following principles as set out in the CEPA Act:

• The principle of certainty, so that annual volatility in fees is minimised or the manner of calculation of fees is known in advance;
• The principle of cost recovery, so that the authority ensures that the aggregate fees it proposes to recover are sufficient to recover its forecast ongoing expenditure and to provide for unforeseen and emergency risk management expenditure;
• The principle of fee minimisation, so that CEPA endeavours to minimise the fees payable, subject to the principle of cost recovery;
• The principle of non-discrimination, so that similarly situated persons undertaking the same activities are subject to similar fee structures; and
• The principle of transparency, so that persons to be charged an environmental management fee are informed of the rationale behind the fee-charging structure proposed by CEPA.

Amending The Act

While the basic regulatory philosophy under the Environment Act remains unchanged, the act was amended in 2014 to provide for strengthened assessment and approval processes for activities requiring permits and for certain administrative matters, as follows, to be dealt with in the regulations:

• Procedures for renewal of environment permits;
• Procedures for transfer of environment permits;
• Procedures for amendment of environment permits;
• Procedures for amalgamation of environment permits;
• Procedures for surrender of environment permits; and
• Reporting by permit holders. These amendments complement the establishment of CEPA and enable a fee structure which will operate, subject to the principles above, on a “user pays” basis. The CEPA Act provides for surplus recurrent revenue to be returned to consolidated revenue following an annual audit of CEPA, other than where the National Executive Council agrees the amounts may be retained by CEPA for specified purposes.

One area of the changes that will be welcomed by permit holders is the ability to amalgamate permits. This possibility is viewed as a win-win for business and the regulator in terms of reducing the regulatory effort required as well as a corresponding reduction in fees.