Native Vegetation Credit Market Bill
2014
Introduction Print
EXPLANATORY MEMORANDUM
General
Overview of the Bill
The Bill establishes a legislative scheme for the creation of a form of
tradeable right to be known as a native vegetation credit.
Native vegetation credits may be created when long-term requirements to
improve the quality and extent of native vegetation are proposed, approved
and implemented under processes set out in the Bill. In particular, native
vegetation credits may be created—

in relation to freehold land under Part 2 of the Bill, in
conjunction with the landowner entering into a native
vegetation management agreement with the Secretary to the
Department of Environment and Primary Industries
("the Secretary") under Part 5 of the Bill; and

in relation to certain classes of Crown land under Part 3 of the
Bill, in conjunction with the responsible Minister placing land
into a high-conservation management framework and/or
approving a vegetation improvement plan under Part 3 of the
Bill.
The number and type of credits to be created in relation to a proposal to
improve the quality and extent of native vegetation under Part 2 or 3 is
governed by formulae set out in Part 4 of the Bill.
The current status of every credit created under the scheme will be recorded
on the Native Vegetation Credit Register established under Part 6 of the Bill,
enabling buyers, sellers and other interested parties to verify the status of
information regarding native vegetation credits and whether they have been
the subject of a range of transactions as outlined below.
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BILL LA INTRODUCTION 27/5/2014
Under the scheme, native vegetation credits, once created, may be allocated
under Part 7 by the holder of the credit towards the satisfaction of regulatory
conditions under other schemes, such as those under which the person is
required to provide an offset for the loss of biodiversity arising from the
destruction of native vegetation. The most common example is expected to
be allocation towards the satisfaction of conditions of planning approvals
under the Planning and Environment Act 1987, as this is something the
Bill expressly permits. However, the Bill provides for allocation towards a
range of purposes. Once a credit is allocated, its value is effectively
exhausted.
Native vegetation credits that have not yet been allocated may also be sold, or
transferred, under Part 8 of the Bill, enabling the buyer to then allocate the
credit for the buyer's purposes, or on-sell it.
In order to ensure that long-term requirements for landowners to improve the
quality and extent of native vegetation are delivered and can be enforced, the
Bill establishes a comprehensive enforcement framework, comprising—

provisions that enable the suspension and/or cancellation of
unallocated and unsold credits under Part 9 of the Bill in
specified circumstances (noting that suspension and
cancellation may also occur under Part 11);

a requirement that any monetary consideration from the first
time that credits are transferred (if within the first 10 years) is
to be paid into a Fund established under Part 10 of the Bill, to
be paid to the relevant landowner or Crown land manager in
instalments as and when land management obligations are
complied with;

various provisions in relation to reporting on compliance,
monitoring and investigation powers, directions to undertake
certain works, powers to undertake those works and recover
costs, enforcement orders, criminal offences and enforceable
undertakings under Part 11 of the Bill;

rights for internal review and merits review at VCAT for some
key decisions, also under Part 11 of the Bill.
Part 12 of the Bill provides for the making of regulations to prescribe various
matters to support the operation of the Bill.
2
Part 13 of the Bill makes consequential amendments to the Planning and
Environment Act 1987 to effectively provide that requirements under a
planning scheme or planning permit under that Act to provide certain types of
"offset" are able to be satisfied by the allocation of native vegetation credits
under the Bill. The Bill also amends that Act to provide that certain types of
offsetting arrangements under that Act are to be exclusively met by the
allocation of native vegetation credits under the Bill.
Part 13 also makes consequential amendments to the Conservation, Forests
and Lands Act 1987, the Crown Land (Reserves) Act 1978, the National
Parks Act 1975, the Traditional Owner Settlement Act 2010 and the
Wildlife Act 1975.
Introduction to native vegetation credits
As a concept, native vegetation credits notionally represent the improvements
and protections to the quality and extent of native vegetation—or gain—that
underpin the creation of native vegetation credits under the Bill. The nature
of the required improvements and protections differs for freehold and Crown
land, recognising the different ways in which the law deals with those types
of land.
For freehold land, the Bill requires there to be a native vegetation
management agreement entered into under Part 5 in order for credits to be
created for that land under Part 2. The agreement must include a "site
management plan" that sets out various actions that the landowner is
required, by the agreement, to carry out. Those actions must be sufficient
so as to result in a "potential gain", which will be determined in accordance
with a manner or method, and criteria, to be prescribed in regulations made
under the Bill. In turn, that "potential gain" is used in calculations required
by Part 4 of the Bill to determine how many credits are to be created in
relation to the site.
For certain classes of Crown land, the Bill enables the creation of native
vegetation credits if there is—

an increase in the protection afforded to vegetation on the land,
by placing it under a high-conservation management
framework, with or without a detailed plan to improve the
vegetation; or

in the case of land that is already under a high-conversation
management framework, a detailed plan to improve the
vegetation being applied to the land (a "vegetation
improvement plan").
3
The sum of the above actions is measured as "potential gain" in accordance
with a manner or method, and criteria, to be prescribed in regulations made
under the Bill. As with freehold land, the calculations under Part 4 of the Bill
use that metric to determine how many credits are to be created in relation to
the site.
While credits arise in relation to land, they are not an interest in land and do
not form part of the land. There is an initial nexus between credits and the
owner of land who created them. However, this subsists only until the first
time the credits are transferred, after which there is no relationship between
the credits and the land in relation to which they were created. This is
explained in the notes to Part 8.
Different types of native vegetation credits
The Bill enables different types of native vegetation credits to be created in
relation to a site, to reflect the different biodiversity values that vegetation on
the site may provide.
Under Part 4 of the Bill, "general biodiversity credits" are effectively created
for an entire site. These native vegetation credits represent the general
biodiversity value of the native vegetation on the site in relation to which
they are created.
Part 4 of the Bill permits an additional set of credits to be created in relation
to areas of particular importance for rare or threatened species of flora or
fauna. The Bill recognises the existence of these areas through the use of a
metric known as a "habitat importance score". Regulations made under the
Bill will provide for the determination of whether habitat importance scores
exist for particular areas of sites, and in respect of which species the scores
exist.
Where an area has a habitat importance score for a particular species, the Bill
will enable "specific biodiversity credits" to be created for that species.
These native vegetation credits represent the specific biodiversity value of the
native vegetation on the site as habitat for the species in relation to which
they are created.
As a consequence of the ability to create different types of credits in relation
to the same area of land (and therefore the same vegetation), the Bill includes
mechanisms that establish a relationship of interdependence between those
credits. These mechanisms essentially enable the maximum range of credits
to be created for a site, optimising the offering a credit holder has on the
credit market, while ensuring that the environmental value of native
vegetation credits (as notionally representing improvements and protection in
vegetation) is only used once. To achieve this, the Bill provides, broadly—
4

for the dividing-up of sites into areas for which different types
of credits are to be created, known as "biodiversity class areas";
and

that all credits of different types created in respect of the same
biodiversity class area are "corresponding alternate credits"
with each other, which effectively establishes interdependence
between them.
Each of these concepts is explained below.
Whether a credit is a general biodiversity credit, or a specific biodiversity
credit, has corresponding alternate credits, or is created in relation to a
particular biodiversity class area, is part of a credit's "nature and attributes"
within the meaning of that term set out in clause 3 of the Bill.
Biodiversity class areas
A "biodiversity class area" under the Bill is essentially a part of a site in
relation to which different types of native vegetation credits are to be created.
In technical terms, this is achieved by distinguishing between areas within a
site based on the number and type of habitat importance scores that exist for
those areas. The Bill effectively requires that a biodiversity class area is to be
created for each part of a site in which there is a unique combination of
habitat importance scores, that is, the same number of habitat importance
scores where those scores relate to the same species of rare or threatened
flora or fauna.
If there are no habitat importance scores on any part of a site, there will not
be any biodiversity class areas. Similarly, if a site has the same number of
habitat importance scores across its entirety, and they relate to the same
species of rare or threatened flora or fauna, there will not be any biodiversity
class areas.
In both cases, the same types of native vegetation credits are being created
for the whole site, and there is therefore no need to divide the site into
biodiversity class areas.
If a site is divided into biodiversity class areas, the native vegetation credits
for the site are created in relation to each of those biodiversity class areas
within the site.
5
Figure 1, below, illustrates how a site with habitat importance scores may
be divided into biodiversity class areas (identified in Figure 1 as "BCA"
followed by a number).
BCA 2
BCA 1
BCA 3
BCA 1
BCA 4
Area key
No habitat importance score
Habitat importance score for Species A
Habitat importance score for Species B
Habitat importance score for Species A and B
Figure 1: schematic diagram showing a site with biodiversity class areas
Corresponding alternate credits
As defined in clause 3 of the Bill, a corresponding alternate credit is, in
effect, every credit of a different type created for the same area (whether the
site or a biodiversity class area). As explained below, these credits are
"alternates" with each other. In relation to Figure 1, the corresponding
alternate credits would be each of the different type of credits created within
each biodiversity class area, as indicated on the following table—
6
Biodiversity Class Area 1

(no corresponding alternate
credits)
general biodiversity
credits
Biodiversity Class Area 2

general biodiversity
credits

specific biodiversity
credits, Species A
(corresponding alternate credits
with each other)
Biodiversity Class Area 3


general biodiversity
credits
(corresponding alternate credits
with each other)
specific biodiversity
credits, Species B
Biodiversity Class Area 4

general biodiversity
credits

specific biodiversity
credits, Species A

specific biodiversity
credits, Species B
(corresponding alternate credits
with each other)
The Bill applies various mechanisms to ensure that only one type of credit for
a site or biodiversity class area can ultimately be used, or "allocated",
meaning that the environmental value of credits created in relation to a site is
not used or accounted for more than once. For example, the allocation of one
type of native vegetation credit from a biodiversity class area results in the
cancellation of all other corresponding alternate credits for that biodiversity
class area under Part 7 (see clause 66).
7
Clause Notes
PART 1—PRELIMINARY
Clause 1
sets out the purposes of the Bill, which are to—

provide for the creation of native vegetation credits (see
Parts 2 and 3);

enable native vegetation management agreements to be
made between the Secretary and landowners (see
Part 5);

enable vegetation improvement plans to be created for
certain Crown land (see Part 3);

establish a Register of records and information relating
to native vegetation credits (see Part 6);

set out the purposes for which native vegetation credits
may be used (see Part 7);

provide for the transfer of native vegetation credits (see
Part 8) and the suspension and cancellation of native
vegetation credits (see Part 9);

establish a Fund for the holding of certain monies
related to native vegetation credits (see Part 10);

provide for the enforcement of native vegetation
management agreements through a variety of
mechanisms (see Part 11);

make consequential amendments to the Conservation,
Forests and Lands Act 1987, the Crown Land
(Reserves) Act 1978, the National Parks Act 1975,
the Planning and Environment Act 1987 and the
Traditional Owner Settlement Act 2010 (see Part 13).
Clause 2
provides for the commencement of the Bill. The provisions of
the Bill are to come into operation on a day or days to be
proclaimed or on 1 July 2015, whichever is the earlier.
Clause 3
sets out the definitions for the purposes of the Bill, including the
conceptually significant definitions discussed below.
8
A biodiversity class area is defined as part of a site that is less
than the entire area of the site and in which there is either the
same number of habitat importance scores that relate to the same
species (paragraphs (a)(i) and (b)(i) of the definition) or in which
there are no habitat importance scores where habitat importance
scores exist in other parts of the site (paragraphs (a)(ii) and (b)(ii)
of the definition). The latter limb of the definition is essentially
the balance of a site in which other biodiversity diversity class
areas exist. There is no requirement for a biodiversity class area
to be a contiguous area.
In Figure 1 in the general notes, "BCA 1" is an example of a
biodiversity class area within the meaning of paragraph (a)(ii);
"BCA 2", "BCA 3" and "BCA 4" are examples of biodiversity
class areas within the meaning of paragraph (a)(i) of the
definition.
If clause 5 of the Bill applies, a filtering process essentially
occurs, which may reduce the number of relevant habitat
importance scores and may therefore also reduce the number of
biodiversity class areas that exist for the site. See the notes to
clause 5 for further explanation and an example.
In relation to Crown land, a compatible reserve is a broad
description of the types of Crown land over which native
vegetation credits may be created under Part 3 of the Bill.
These are—

any national parks, wilderness parks and state parks
under the National Parks Act 1975;

coastal parks under Schedule Three of the National
Parks Act 1975, being Bay of Islands Coastal Park,
Cape Conran Coastal Park, Discovery Bay Coastal Park,
Gippsland Lakes Coastal Park and Cape Liptrap Coastal
Park and Langwarrin Flora and Fauna Reserve, also a
park under Schedule Three of the National Parks Act
1975;

any land that is permanently reserved under the Crown
Land (Reserves) Act 1978 for a "compatible purpose"
(see below);

any land described in section 44 of the Crown Land
(Reserves) Act 1978, being land permanently reserved
under that Act as a nature conservation reserve.
9
A compatible purpose is any of the following—

the preservation of areas of ecological significance;

carbon sequestration in vegetation and soil;

the preservation of species of native plants;

the propagation or management of wildlife or the
preservation of wildlife habitat.
These are all purposes specified in section 4(1) of the Crown
Land (Reserves) Act 1978.
If Crown land is reserved for the final purpose referred to above
(being paragraph (d) of the definition of compatible purpose),
the land is managed as a State Wildlife Reserve under the
Wildlife Act 1975 by virtue of sections 14(b)(i) and 15 of that
Act. For this reason, the definition of relevant Crown land
Minister includes the Minister administering that Act, in relation
to such land.
A corresponding alternate credit is a credit created for an area
for which other credits of different types are also created. If a
credit is a corresponding alternate credit, it will effectively have a
relationship of interdependence with all credits of a different type
created for the same area. For example—

if one type of credit is allocated under Part 7 (for the
purposes of this definition, this would be the original
credit), that Part requires a proportionate cancellation of
all corresponding alternate credits of the allocated credit
(see clause 66(1)); and

if an original credit is transferred under Part 8, that Part
requires the simultaneous transfer of all corresponding
alternate credits of the transferred credit (see
clause 70(2)).
The effect of the above is that—

corresponding alternate credits are always in the same
ownership; and

if any corresponding alternate credits are allocated,
there is a proportionate cancellation of those credits'
corresponding alternate credits.
10
Whether or not a credit has corresponding alternate credits will
be recorded on the Register under Part 6 as a nature and
attribute (as defined in clause 3) of the credit.
Native vegetation is defined in the Bill as any plant that is
indigenous to Victoria, whether vascular or non-vascular, and
whether living or dead.
Private land is defined in the Bill essentially as freehold land
under the Transfer of Land Act 1958.
Clause 3 also includes definitions of authorised officer,
catchment and land protection region, Central Plan Office,
Crown land, Crown land manager, fauna, flora, Fund, general
biodiversity credit, general gain, habitat importance score,
Land Register, Melbourne Strategic Assessment Area, native
vegetation credit, Native Vegetation Credit Register, native
vegetation management agreement, native vegetation
management agreement fee, noxious weed, offset condition,
owner, planning permit, planning scheme, pre-existing credit,
qualified assessor, Registrar of Native Vegetation Credits,
Registrar of Titles, relevant land agreement, relevant land
management plan, relevant species, reservation gain, Secretary,
site, site management plan, specific biodiversity credit, specific
gain, strategic biodiversity score and vegetation improvement
plan.
Clause 4
sets out the objects of the Bill, which are to—

contribute to Victoria's long-term biodiversity;

to balance economic and environmental considerations
in the use and development of land and the protection of
Victoria's native vegetation;

facilitate an efficient and effective native vegetation
offset market in Victoria; and

contribute to the achievement of best practice
environmental regulation in Victoria.
11
Clause 5
sets out a habitat importance threshold test that applies by default
to every application or determination to create native vegetation
credits under Part 2 or 3 of the Bill. In broad terms, the effect of
the test is to "filter out" habitat importance scores for certain
species of rare or threatened flora or fauna on a site if the
"relative importance" of the site for that species is low.
This occurs by—

identifying the species for which a habitat importance
score exists for the site;

measuring the relative importance of the site as a habitat
for that species in the manner set out in the regulations;

determining whether that relative importance exceeds
the threshold set out in the regulations.
If a habitat importance score for a particular species on a site
does not exceed the threshold, the effect of clause 5 is that, when
the test applies, that score—

is not used in organising the site into biodiversity class
areas (for the purposes of that definition in clause 3 of
the Bill); and

is not used for any other purpose in relation to the site or
the biodiversity class areas on the site.
The effect is that, if the test applies, there are likely to be fewer
biodiversity class areas and fewer types of specific biodiversity
credit created for a site. This simplifies the number and type of
credits created for the site.
Example
Assume that the habitat importance threshold test is applied to
the site shown in Figure 1 in the general notes. According to the
results of the test, the relative importance of the site as habitat for
Species B is below the threshold. Accordingly, the habitat
importance score for Species B is not used in organising the site
into biodiversity class areas or in calculating the specific gain for
the site.
12
In practical terms, this would mean that the site—
Clause 6

only has two biodiversity class areas, the first being the
areas shown as BCA 1 and BCA 3 in Figure 1, and the
second being the area shown as BCA 2 and BCA 4 in
Figure 1 (BCA 3 in Figure 1 would not be a separate
area);

has no specific gain calculated for Species B.
defines potential gain for the purposes of the Bill. Potential gain
is a key metric used in the calculation of native vegetation credits
under Part 4 of the Bill. It is defined separately for private land
and Crown land because the scenarios for creating credits on
those land types differ.
For private land, potential gain means the predicted improvement
in the quality, extent or both of native vegetation in an area
resulting from the requirements of a site management plan.
A site management plan is always required under Part 2 for the
creation of credits for private land.
For Crown land, potential gain means either or both the
"reservation gain" as that term is defined in clause 3) or the
predicted improvement in the quality, extent or both of native
vegetation in an area resulting from the requirements of a
vegetation improvement plan. At least one of a reservation gain
or vegetation improvement plan is required under Part 3 for the
creation of credits on Crown land.
In the case of both private and Crown land, the quantum of
potential gain is to be determined in accordance with regulations
made under this Bill.
Clause 7
provides that native vegetation credits are not personal property
for the purposes of the Commonwealth's Personal Property
Securities Act 2009. The Bill regulates the manner in which
native vegetation credits can be transacted with and it is not
appropriate for them to also be the subject of a security under the
Commonwealth Act.
Clause 8
provides that the Bill will bind the Crown.
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PART 2—CREATION OF NATIVE VEGETATION CREDITS
FOR PRIVATE LAND
Division 1—Application for native vegetation credits
Clause 9
sets out the process and requirements for an owner of private land
(as that term is defined in clause 3) to apply to the Secretary for
native vegetation credits to be created for that land.
Subclause (3) specifies a range of information that must
accompany an application, much of which is directly relevant to
other provisions of the Bill. Notably—

under subclause (3)(c) the application must include a
site management plan (as that term is defined in
clause 3), which will ultimately form part of a native
vegetation management agreement under Part 5 in
relation to the land if the application is accepted—
see clause 36(3);

under subclause (3)(d) the application must include an
estimate by a "qualified assessor" (as that term is
defined in clause 3) of the reasonable costs of
implementing the site management plan, which is
relevant for the purposes of clause 75;

under subclause (3)(e), for a site without biodiversity
class areas, the application must include the area of the
site, the "potential gain" (see clause 6), the "strategic
biodiversity score" and any "habitat importance score"
(as those terms are defined in clause 3 of the Bill)—
each of these inputs informs the calculation of credits
under Part 4 of the Bill;

under subclause (3)(f), for a site that contains
biodiversity class areas, the application must include
the same information referred to in subclause (3)(e) in
relation to each biodiversity class area;

under subclause (3)(g), if the owner wishes to disapply
the habitat importance threshold test under clause 5, a
statement to that effect—this is a matter for the owner's
discretion.
The regulations may prescribe additional information to be
included in applications under clause 9.
14
Clause 10 provides the Secretary with a power to request any further
information from an applicant if the Secretary considers it
necessary for the purposes of determining an application under
clause 9.
Clause 11 provides the Secretary with a power to require an applicant to
amend an application, if the Secretary considers it necessary to
ensure the application is correct. An applicant is then required to
resubmit the amended application or, should the applicant prefer,
the applicant may withdraw the application.
Clause 12 provides that the Secretary must accept an application (with or
without amendment) or reject it. The Secretary must reject an
application in the circumstances specified in subclause (2), which
are—

if the application is not made in accordance with
clause 9(2);

if the application does not contain the information
required under clause 9(3);

if the Secretary considers the estimate provided under
clause 9(3)(d) to be unreasonable (for example, if it
underestimates the reasonable cost to a person of
implementing the site management plan);

if the site management plan specifies things that the
owner of the land is already required to do under other
laws or arrangements described in the regulations—this
is effectively an additionality test;

if the site does not meet eligibility criteria to be set out
in the regulations, which will deal with matters as to
whether the site is unsuitable for the long-term
protection of native vegetation.
Under subclause (3), the Secretary may accept an application and
amend the potential gain in that application where the Secretary
considers it necessary to ensure the potential gain is accurate.
This power is expected to relate to minor or straightforward
amendments, as compared with the power in clause 11.
Subclauses (4) and (5) require the Secretary to notify the
applicant of a decision under clause 12.
15
As with any decision to reject an application, any decision to
accept an application while amending potential gain is
reviewable under Division 7 of Part 11 of the Bill.
Clause 13 provides that it is an offence for a person to provide information
in an application under clause 9, or in relation to such an
application (for example, in providing further information under
clause 10), that the person knows, or ought to know, is false or
misleading in a material particular.
The maximum penalty is 120 penalty units.
Division 2—Recording of native vegetation credits
Clause 14 sets out the requirements for native vegetation credits to be
recorded on the Native Vegetation Credit Register established
under Part 6, following the Secretary's acceptance under
clause 12 of an application under clause 9. Under this clause, the
Secretary is required to notify the Registrar of Native Vegetation
Credits (as that term is defined under clause 3) that the credits are
to be recorded. Clause 50 then requires the Registrar to record
certain information about those credits on the Native Vegetation
Credit Register.
Under subclause (3), before the Secretary may notify the
Registrar, the Secretary must—

enter into a native vegetation management agreement
under clause 36 with the applicant; and

ensure that the agreement is recorded on the title to the
subject site under the Transfer of Land Act 1958, in
accordance with clause 37.
These requirements ensure that ongoing requirements for the
protection and improvement of native vegetation on the subject
site are established before the native vegetation credits are
created.
Under subclause (4), a native vegetation credit that is the subject
of an application accepted under clause 12 is created when it is
recorded in the Register. Under subclause (5), it cannot be dealt
with under Part 7 or 8 of the Bill until such time as it is recorded
on the Register.
16
PART 3—CREATION OF NATIVE VEGETATION CREDITS
FOR CROWN LAND
Part 3 sets out 3 different circumstances in which native vegetation credits
may be created in relation to Crown land. The circumstances are described
in clause 16.
Division 2 of Part 3 contains the mechanisms to create credits for the
methods referred to in clauses 16(a) and (b).
Divisions 3 and 4 of Part 3 contain the mechanisms to create credits for the
method referred to in clause 16(c).
Division 1—General
Clause 15 provides that the Minister is the holder of all credits created
under Part 3 (whether under Division 2 or Division 4) except
those that are provided to a person from whom land is purchased
under Division 4 of Part 3.
To avoid any doubt, the clause also provides that the Minister
does not own credits that the Minister has transferred to another
person under Part 8.
Division 2—Creation of native vegetation credits for Crown land
Clause 16 describes the circumstances in which Part 3 enables native
vegetation credits to be created for Crown land, being—

when unreserved Crown land is permanently reserved
under the Crown Land (Reserves) Act 1978 for a
compatible purpose—see clause 17; and

in relation to an existing compatible reserve, when a
vegetation improvement plan is approved for the land
under Division 5 of Part 3—see clause 18; and

when the Minister purchases private land under the Bill
and the land is permanently reserved under the Crown
Land (Reserves) Act 1978 for a compatible purpose—
see clauses 20 to 27.
Clause 17 sets out the process and requirements for the Minister to create
native vegetation credits using the method of permanently
reserving unreserved Crown land for a compatible purpose
(as that term is defined in clause 3) under the Crown Land
(Reserves) Act 1978.
17
In broad terms, the process is for the Minister to make a
determination that includes a range of information required by
subclause (3). The Minister can only make a determination to
create native vegetation credits under subclause (2) if the
Minister obtains the consent of the Minister administering the
Crown Land (Reserves) Act 1978 and if the conditions in
subclause (4) are met.
The act of reserving the land, of itself, creates a "reservation
gain" (as defined in clause 3) which is a component of "potential
gain" (see clause 6). Under this clause, a vegetation
improvement plan (made under Division 5 of Part 3) is optional.
If a plan is made for the land, there will be a greater potential
gain.
The particular requirements of clause 17 are explained below.
Subclause (1) provides that clause 17 applies to unreserved
Crown land that is proposed to be permanently reserved for a
compatible purpose.
Subclause (2) requires the Minister's determination to be made
with the consent of the Minister administering the Crown Land
(Reserves) Act 1978, given that that Minister will be responsible
for recommending to the Governor in Council that the land be
reserved under section 4 of that Act.
Subclause (3) specifies the information that must be included in
the Minister's determination. Similar to the process for creating
credits for private land under Part 2, much of this information is
directly relevant to other provisions of the Bill. Notably—

under subclause (3)(b), the determination must specify
details of the proposed reservation of the land;

under subclause (3)(c), if a vegetation improvement
plan is prepared for the land, the determination must
include a copy of the plan, the approval for the plan
under clause 29 and an estimate by a qualified assessor
of the reasonable cost to the "Crown land manager"
(as that term is defined in clause 3) of implementing the
plan—this is relevant for the purposes of clause 76;

under subclause (3)(d), for a site without biodiversity
class areas, the determination must include the area of
the site, as well as the "potential gain", the "strategic
biodiversity score" and any "habitat importance
18
score"—each of these inputs informs the calculation of
credits under Part 4 of the Bill;

under subclause (3)(e), for a site that contains
biodiversity class areas, the determination must include
the same information referred to in subclause (3)(d) in
relation to each biodiversity class area;

under subclauses (3)(f) and (g), given that the
determination is the document that approves the
creation of the credits (compared with an application for
private land under clause 9, in relation to which there is
also an acceptance of that application under clause 12),
the determination must include the number of credits to
be created and the nature and attributes of those credits
(as that term is defined in clause 3);

under subclause (3)(h), if the Minister has not applied
the habitat importance threshold test under clause 5 to
the creation of the credits, a statement to that effect—
this is a matter for the Minister's discretion.
Under subclause (3)(i), the regulations may prescribe additional
information to be included in determinations under clause 17.
Subclause (4) specifies conditions-precedent to the making of the
determination in relation to additionality and site eligibility.
These are similar to the grounds for rejecting an application in
relation to private land under clause 12(2) of the Bill.
Subclause (5) provides that a determination under clause 17 takes
effect upon the reservation of the land as proposed in subclause
(3)(b). The reservation will be effected by the Governor in
Council acting under section 4 of the Crown Land (Reserves)
Act 1978 upon the recommendation of the Minister
administering that Act.
Once the determination is made, the Minister must notify the
Registrar of Native Vegetation Credits—see clause 19.
Clause 18 sets out the process and requirements for the Minister to create
native vegetation credits using the method of applying a
vegetation improvement plan to an existing compatible reserve
(as that term is defined in clause 3).
19
The process and requirements are broadly similar to those under
clause 17, except that in this case there is no reservation required
(as the land is already reserved) and there must be a vegetation
improvement plan prepared in order to provide the potential gain.
A determination under clause 18 takes effect when it is made.
Once the determination is made, the Minister must notify the
Registrar of Native Vegetation Credits—see clause 19.
Clause 19 requires the Minister to notify the Registrar of Native Vegetation
Credits of the making of a determination to create credits under
clause 17 or 18.
Similar to clause 14 in relation to Part 2, clause 19 provides that a
native vegetation credit that is the subject of a determination
under Division 2 of Part 3 is created when it is recorded on the
Native Vegetation Credit Register and cannot be dealt with under
Parts 7 or 8 of the Bill until such time as that occurs.
Division 3—Application for native vegetation credits prior to
purchase of land
Division 3 sets out the manner in which an owner of private land may, with
the Minister's approval, instigate the process for the creation of native
vegetation credits arising from the purchase of that land under Division 4.
The sequence of events and interaction between Divisions 3 and 4 reflects a
number of key principles that warrant explanation.
First, given that the acquisition of land under Division 4 is by agreement
only, it is appropriate for the sequence to commence with an application by
the owner of the land under Division 3. This reflects the fact that it would be
an owner's decision whether or not to consider creating credits by selling land
to the Minister.
Second, given that the consideration for a purchase of land by the Minister
under Division 4 may include the provision of native vegetation credits to the
owner, it is desirable for the purposes of certainty and confidence in purchase
negotiations that a decision on the number and type of native vegetation
credits be made ahead of that purchase. The application process in
Division 3 meets this objective by preceding the purchase process in
Division 4.
20
The 2 Divisions interact by Division 3 requiring that any application be made
with the consent of the Minister, which would be indicative of the Minister's
in-principle approval to consider purchasing the land under Division 4.
Clause 20 enables the owner of private land to apply to the Secretary for the
creation of credits for all or part of the land in limited
circumstances.
The application process is broadly similar to that in clause 9.
The onus is on the owner to prepare the application, including
those aspects of the application required to be prepared by a
qualified assessor.
However, given that the site will become Crown land if
purchased under Division 4, the application is subject to some
additional features that are relevant to Crown land, namely—

under subclause (1), the application cannot be made
without the Minister's consent, reflecting the need for
the Minister to be willing to purchase the land under
Division 4 should the application be successful;

also under subclause (1), the application must be made
with the consent of the Minister administering the
Crown Land (Reserves) Act 1978, given that a
purchase resulting from an application under this
provision results in the reservation of the land under that
Act—see clause 25;

under subclause (3)(c), the application must include
details of the proposed reservation of the site;

under subclause (3)(d), the application must include
details of the person that will be the Crown land
manager if the land is purchased and becomes Crown
land (this is relevant for clauses 23(2)(e) and 28(2));

under subclause (3)(e), details of any vegetation
improvement plan must be included if one is prepared.
Similar to clause 17, the act of reserving the land (once
purchased under Division 4) creates a reservation gain and a
vegetation improvement plan is optional. If a vegetation
improvement plan is proposed for land there will be a greater
potential gain and therefore a greater number of credits will be
created from the transaction.
21
As part of ensuring that the purchase of land under Division 4
can be made with certainty as to the number of credits to be
created by the transaction, clause 20 requires any vegetation
improvement plan to have already been approved by the Minister
under clause 29; if the plan were still able to change, this could
affect the number of native vegetation credits to be created from
the application.
Clause 21 provides the Secretary with a power to request any further
information from an applicant if the Secretary considers it
necessary for the purposes of determining an application under
clause 20.
Clause 22 provides the Secretary with a power to require an applicant to
amend an application if the Secretary considers it necessary to
do so to ensure the application is correct. An applicant is then
required to resubmit the amended application or, should the
applicant prefer, the applicant may withdraw the application.
If the applicant resubmits the application, Ministerial consent
would be required again, as with the original application under
clause 20.
Clause 23 requires the Secretary to accept an application with or without
amendment, or reject it, similar to clause 12. The key difference
is that a decision under clause 23 is not reviewable, given the
fundamentally different nature of an application under clause 20
as compared with an application under clause 9.
The acceptance of an application under clause 23 does not, by
itself, result in the creation of native vegetation credits.
There must still be a purchase of land and transfer of that land to
the Crown—see Division 4.
Division 4—Purchase of land
Clause 24 provides the Minister with a power to purchase, by agreement,
land that is the subject of an accepted application under
Division 3. The Minister must be satisfied that the land is
suitable for reservation for the compatible purpose specified in
the application under clause 20. The Minister, and the Minister
administering the Crown Land (Reserves) Act 1978, will have
approved that purpose as part of consenting to the application
under clause 20.
22
Under subclause (2), an agreement under this clause may make
provision for some or all of the consideration for the purchase
to be the issuing of native vegetation credits (created pursuant
to the application under clause 20) to the owner of the land.
An agreement may also make provision for a contribution by the
vendor towards the Crown land manager's future management
costs, should that be relevant as part of commercial negotiations
relating to the sale.
Subclause (3) recognises the interrelationship between
corresponding alternate credits under the Bill and effectively
provides that corresponding alternate credits created under
Division 4 must remain in the same ownership.
Subclause (4) provides that the issuing of native vegetation
credits to an owner under Division 4 is not a transfer under the
Bill, which effectively means that the credits can be suspended
under clause 79 or cancelled under clause 81.
Clause 25 provides that the land, once purchased, becomes Crown land
permanently reserved under the Crown Land (Reserves) Act
1978 for the compatible purpose specified in the application
under clause 20. The effect of this provision is that the Crown
Land (Reserves) Act 1978 will apply to the land as if the land
had been reserved under section 4 of that Act.
Clause 26 requires the Minister to notify the Registrar of Native Vegetation
Credits of the transfer of the land and provide details of the
native vegetation credits to the Registrar—this will effectively be
the credits in the application that the Secretary accepted under
clause 23. The Minister must, in particular, notify the Registrar
as to which of the native vegetation credits created are to be
issued to the former owner of the land (described in the clause as
the "transferor") and which are to be held by the Minister.
Similar to clause 14 in relation to Part 2, clause 26 provides that a
native vegetation credit created pursuant to the transfer of land
under Division 4 of Part 3 is created when recorded on the Native
Vegetation Credit Register and cannot be dealt with under Part 7
or 8 of the Bill until such time as that occurs.
Clause 27 requires the Minister to publish a notice of the transfer of the land
in the Government Gazette to provide a public record of the
reservation of the land.
23
Division 5—Vegetation improvement plans
Clause 28 sets out the process and requirements for the preparation of
vegetation improvement plans for Crown land. In effect, a plan
may be prepared—

in relation to unreserved Crown land that is proposed to
be reserved for a compatible purpose, as part of the
creation of native vegetation credits under clause 17;

in relation to any existing compatible reserve, as part of
the creation of native vegetation credits under clause 18;
and

in relation to land to be purchased by the Crown and
reserved for a compatible purpose under Division 4, as
part of the creation of native vegetation credits arising
from an application under clause 20.
Subclause (1) requires that, for existing Crown land, the plan be
prepared by the Crown land manager following in-principle
approval to do so from the relevant Crown land Minister.
Subclause (2) requires that, for land that is to be the subject of an
application under clause 20, the plan be prepared by the person
who will be the Crown land manager (see clause 20(3)(d))
following in-principle approval from the Minister administering
the Crown Land (Reserves) Act 1978, who will be responsible
for the land should it be purchased under clause 24 and reserved
under clause 25.
Subclause (3) specifies that a plan must include details as to the
management, improvement and protection of native vegetation
on the land during the 10−year period in which the plan is in
force (see clause 30(3)). The regulations may prescribe
additional information to be included in a plan and a plan must be
consistent with any "relevant land agreement" and "relevant land
management plan", as those terms are defined in clause 3.
Subclause (4) requires a vegetation improvement plan to be in the
prescribed form.
The preparation of a vegetation improvement plan will be a "land
use activity" under Part 4 of the Traditional Owner Settlement
Act 2010—see clause 137.
24
Clause 29 specifies the requirements for approval of a vegetation
improvement plan that has been prepared by a Crown land
manager or proposed Crown land manager under clause 28.
A plan will be approved if—

it complies with the requirements of clause 28;

the Minister gives an approval to the plan under this
clause;

in the case of a plan prepared for an existing compatible
reserve (that is, as part of the creation of native
vegetation credits under clause 18), the relevant Crown
land Minister (as that term is defined in clause 3) also
approves the plan.
The approval of the relevant Crown land Minister is not
separately required under clause 29 for plans prepared as part of
the creation of native vegetation credits under clause 17, as the
consent of the Minister administering the Crown Land
(Reserves) Act 1978, required under clause 17, effectively
includes endorsement of any vegetation improvement plan.
The approval of that Minister to a vegetation improvement plan
for land subject to an application under clause 20 is not
separately required, for a similar reason—that Minister consents
to the application to create credits under clause 20.
Clause 30 specifies when a vegetation improvement plan comes into effect.
The intent is that a vegetation improvement plan may only ever
be in force over land in relation to which native vegetation credits
have been created.
In relation to a plan approved for unreserved Crown land that is
proposed to be reserved for a compatible purpose as part of the
creation of native vegetation credits under clause 17, the plan
comes into effect together with the Minister's determination
under clause 17.
Similarly, in relation to a plan approved for an existing
compatible reserve as part of the creation of native vegetation
credits under clause 18, the plan comes into effect together with
the Minister's determination under clause 18.
25
In relation to a plan for land to be purchased by the Crown and
reserved for a compatible purpose under Division 4, the plan
comes into effect when the land is transferred to the Crown.
The effect of a vegetation improvement plan coming into force is
that the Crown land manager must carry out any vegetationmanagement works consistently with the plan—see amendments
made to the relevant land management legislation in clauses 134,
135 and 138.
Once a plan has taken effect, the Minister is required to lodge a
copy of it with the Central Plan Office, as that term is defined in
clause 3.
The plan expires 10 years after it commences.
Clause 31 sets out the process and requirements for variation of a vegetation
improvement plan. The overall intent of the clause is to ensure
that appropriate compensation is provided for any reduction in
improvements and protection for native vegetation arising from a
variation.
To achieve this, subclause (1)(a) provides that the Minister may
vary a vegetation improvement plan if the Minister and the
relevant Crown land Minister are satisfied that the variation
does not impact on the improvements or protection for native
vegetation provided in the unvaried plan. In any other case,
subclause (1)(b) provides that the Minister and the relevant
Crown land Minister may make a variation if the Minister
provides an "equivalent reduction" in credits. This may occur—

under subclause (1)(b)(i), by first cancelling any
remaining credits held by the Minister created for the
site that is subject to the plan, being credits that have
not been allocated or transferred (or, if they have been
transferred, that have been transferred back to the
Minister), the amount required being guided by the
formulae in subclauses (2)−(5); and

under subclause (1)(b)(ii), if there are not enough
credits that can be cancelled under subclause (1)(b)(i)
to satisfy the amount required by subclauses (2)−(5),
allocating credits under this clause, the amount required
being guided by the formulae in subclauses (6)−(8).
26
By way of overview of the balance of the clause—

subclause (2) sets out an overarching formula for the
required amount of general biodiversity credits that
must be cancelled, which in turn refers to a formula
under subclause (4);

subclause (3) sets out an overarching formula, similar to
that in subclause (2), for specific biodiversity credits
that must be cancelled, which in turn refers to a formula
under subclause (5);

subclause (6) sets out a formula for determining how
many credits must be allocated under subclause
(1)(b)(ii) if there are not enough to cancel under
subclause (1)(b)(i), which in turn relies on
methodology set out in subclauses (7) and (8);

subclauses (9) and (10) set out machinery provisions.
Cancellation under subclause (1)(b)(i)
Subclause (2) provides that, if an "equivalent reduction" is
required by subclause (1)(b), the required cancellation of
"general biodiversity credits" is the amount of a "reduced general
gain" calculated in accordance with subclause (4) multiplied by
1000. This will produce a number of general biodiversity credits
that represents the reduction in protection and improvement for
native vegetation provided under the varied plan.
Subclause (3) provides that, if an "equivalent reduction" is
required by subclause (1)(b), the required cancellation of
"specific biodiversity credits" is the amount of a "reduced
specific gain" calculated in accordance with subclause (5)
multiplied by 1000. This will produce a number of specific
biodiversity credits that represents the reduction in protection and
improvement for native vegetation provided under the varied
plan.
Subclause (4) sets out the formula to calculate the "reduced
general gain" for the purposes of subclause (2). Essentially, the
"reduced general gain" is the original "general gain" under
clause 34 at the time the native vegetation credits for the site
were created, less the amount of a "varied gain" which must be
calculated afresh under clause 34 based on the plan as proposed
to be varied.
27
Subclause (5) sets out the formula to calculate the "reduced
specific gain" for the purposes of subclause (3). Essentially, the
"reduced specific gain" is the original "specific gain" under
clause 35 at the time the native vegetation credits for the site
were created, less the amount of a varied gain which must be
calculated afresh under clause 35 based on the plan as proposed
to be varied.
As is discussed in relation to clauses 34 and 35, the calculations
under those clauses lead to—

a total number for "general gain" for an entire site or, if
the site has biodiversity class areas, for each
biodiversity class area; and

a total number for "specific gain" for each relevant
species (see the definition of that term in clause 3) for
an entire site, or, if the site has biodiversity class areas,
for each biodiversity class area.
Therefore, depending on the configuration of a site, an
"equivalent reduction" required for the purposes of subclause
(1)(b) by subclauses (2)−(5) may be comprised of a number of
general biodiversity credits for each biodiversity class area on a
site and a number of specific biodiversity credits for particular
relevant species for each biodiversity class area on a site.
Cancellation under this clause of each of the credits included in
the "reduced general gain" and "reduced specific gain" will be
required, even where they are corresponding alternate credits
with each other.
Allocation under subclause (1)(b)(ii)
Subclause (6) provides a mechanism to make up any shortfall in
the amount of credits that is required to be cancelled by
subclauses (2) and (3) if the Minister does not hold sufficient
unallocated credits created for the site that is the subject of the
proposed variation.
The mechanism necessarily applies to credits other than those
created for the site that is the subject of the proposed variation; if
such credits exist, they would be required to be cancelled under
subclause (1)(b)(i).
28
The mechanism under subclause (6) involves the acquisition, if
necessary, and allocation of certain native vegetation credits in
accordance with subclauses (6)−(8). Subclause (6) includes a
formula to determine the totals of general biodiversity credits and
specific biodiversity credits that are required to be allocated.
Despite this formula producing a total, only some of the native
vegetation credits included in the total need to be allocated.
This is in order to properly account for the role of corresponding
alternate credits. Given that the allocation under subclause
(1)(b)(ii) is to compensate for credits that have already been
transferred or allocated from the site, the formula acknowledges
that, at the time those credits were transferred or allocated, any
corresponding alternate credits of the transferred or allocated
credits were either cancelled (see clause 66(1)) or would have
transferred to the new owner (see clause 70(2)). Without doing
this, the formula would require the Minister to acquire and
allocate many more credits than could ever have been allocated
from the site, in order to meet the totals of general gain and
specific gain required under subclause (6).
Accordingly—

subclause (7) provides that the Minister may allocate
any native vegetation credits to satisfy the formula in
subclause (6), provided that the credits are of the same
type as those that have previously been allocated or
transferred from the site or provided to a transferor
under Division 4 of Part 3; and

subclause (8)(a) effectively provides that when credits
are allocated under this clause, they are to be treated as
if they were credits that were originally created for the
site (or a biodiversity class area on the site), which in
turn means that—

the allocated credits may be regarded as "original
credits" created for the site or biodiversity class
area that is the subject of the proposed variation,
within the meaning of the definition of
corresponding alternate credits in clause 3 of the
Bill;
29


the other remaining credits that exist for the site
or biodiversity class area that is the subject of the
proposed variation acquire "corresponding
alternate credit" status to those being allocated;

those corresponding alternate credits of the
allocated credits are regarded as being cancelled
under clause 66 upon the allocation being made
under clause 31; and
subclause (8)(b) provides that the cancellation of these
corresponding alternate credits arising from clause
(8)(a) is to be counted towards the total required by the
formula under subclause (6).
Example
Assume that the Minister has created native vegetation credits on
a site on Crown land under clause 18. The site does not have any
biodiversity class areas. The total general gain for the site is
1·5 general biodiversity equivalence units. The total specific
gain for the site is 0·9 in respect of Species A, and 0·75 in respect
of Species B. This results in 3 types of credits being created, all
of which are corresponding alternate credits with each other:
1500 general biodiversity credits; 900 specific biodiversity
credits, Species A; and 750 specific biodiversity credits,
Species B. In this context—

The Minister transfers 900 general biodiversity credits.
This results in a "balance" of credits created in relation
to the site of: 600 general biodiversity credits and, as a
result of clause 70(2), 360 specific biodiversity credits,
Species A and 300 specific biodiversity credits,
Species B.

The Minister also transfers 240 specific biodiversity
credits, Species A. This results in a "balance" of credits
created in relation to the site of: 120 specific
biodiversity credits, Species A and, as a result of
clause 70(2), 200 general biodiversity credits and
100 specific biodiversity credits, Species B.
30

The proposed variation to the vegetation improvement
plan will result in a varied general gain for the site of
1·2 and a varied specific gain of 0·72 for Species A and
0·6 for Species B. The reduction for each is 0·3, 0·18
and 0·15 respectively.

Subclause (2) therefore requires a reduction of
300 general biodiversity credits and subclause (3)
requires a reduction of 180 specific biodiversity credits,
Species A and 150 specific biodiversity credits,
Species B.

As these requirements are greater than the amounts the
Minister has remaining for the purposes of subclause
(1)(b)(i), an allocation will be required under subclause
(1)(b)(ii). Applying the formula in subclause (6), the
amounts required to be allocated are—

100 general biodiversity credits, being the 300
required to be cancelled by subclause (2), less
the 200 the Minister still holds;

60 specific biodiversity credits, Species A, being
the 180 required to be cancelled by subclause
(3), less the 120 the Minister still holds;

50 specific biodiversity credits, Species B, being
the 150 required to be cancelled by subclause
(3), less the 100 the Minister still holds.

Subclause (7) permits the Minister to allocate credits of
the same kind as any of the credits that the Minister has
previously allocated or transferred. The Minister
chooses to acquire and allocate 50 general biodiversity
credits and 30 specific biodiversity credits, Species A,
to provide the required allocation.

Applying the methodology in subclause (8), in addition
to the amounts allocated, the Minister's allocations
enable the following additional values to be counted for
the purposes of the totals required by subclause (6)—

in relation to the allocation of 50 general
biodiversity credits, the value of an additional
30 specific biodiversity credits, Species A
(30 being the proportion of specific biodiversity
31
credits, Species A, that are corresponding
alternate credits to 50 general biodiversity credits
created for the site) and 25 specific biodiversity
credits, Species B (25 being the proportion of
specific biodiversity credits, Species B, that are
corresponding alternate credits to 50 general
biodiversity credits created for the site); and


in relation to the allocation of 30 specific
biodiversity credits, Species A, the value of an
additional 50 general biodiversity credits
(50 being the proportion of general biodiversity
credits that are corresponding alternate credits to
30 specific biodiversity credits, Species A,
created for the site), and 25 specific biodiversity
credits, Species B (25 being the proportion of
specific biodiversity credits, Species B, that are
corresponding alternate credits with 30 specific
biodiversity credits, Species A, created for the
site).
Based on this methodology, the entire allocation
required by subclause (6) has been satisfied, and the
Ministers may now approve the variation.
Machinery provisions
Subclause (9) provides that the actual corresponding alternate
credits of those that are allocated under subclause (6) (if there are
any) are also cancelled upon the allocation being made under this
clause. This is not necessary for the purposes of the formula
under clause 31 but is necessary to reflect the principle that a
native vegetation credit under the Bill may only be used once.
Once a variation is approved under clause 31, subclause (10)
requires the Crown land manager to lodge a consolidated copy of
the plan, as varied, with the Central Plan Office, as that term is
defined in clause 3.
Clause 32 requires the Minister to notify the Registrar of Native Vegetation
Credits of any cancellation or allocation made under clause 31.
The Registrar is then required to make the necessary recording in
the Native Vegetation Credit Register.
32
PART 4—CALCULATION OF NATIVE VEGETATION
CREDITS
Part 4 regulates the number and type of native vegetation credits that may be
created under Parts 2 and 3 of the Bill.
Clause 33 provides the base formulae for the creation of native vegetation
credits under the Bill.
Subclause (1) provides that the total number of general
biodiversity credits that may be created in relation to a site is the
"general gain" for the site multiplied by 1000. The "general
gain" is a metric to be calculated in accordance with clause 34.
The "general gain" for a site may not always be one whole
number—if the site has biodiversity class areas, the "general
gain" for the site would be comprised of a component for each
biodiversity class area on the site: see clause 34 for an
explanation.
Subclause (2) provides that the total number of specific
biodiversity credits that may be created in relation to a site is the
"specific gain" for the site multiplied by 1000. The "specific
gain" is a metric to be calculated in accordance with clause 35.
As with "general gain", the "specific gain" for a site may not
always be one whole number—in addition to there being a
component for each biodiversity class area, there would also be a
component for each species in relation to which the "specific
gain" is calculated: see clause 35.
While this clause specifies the total number of credits that may be
created in relation to a site, it is important to note that some of
these credits may have a relationship of interdependence with
each other as a result of the definition of corresponding alternate
credit in clause 3. See the general notes and the notes to
clauses 3, 34 and 35 for further explanation.
The notes to clauses 34 and 35 include examples that illustrate
how clause 33 operates in conjunction with those clauses.
Clause 34 provides the formula for calculating "general gain" for the
purposes of clause 33(1). The formula is also required to be used
in calculations under clauses 31 and 40.
33
The formula has 2 iterations which apply depending on whether
the site has any biodiversity class areas (as that term is defined
in clause 3). See the general notes and the notes to clause 3.
The first iteration, in subclause (1), applies to a site that does not
have any biodiversity class areas. The formula requires a
multiplication of—

the area of the site in hectares;

the potential gain for the site; and

the strategic biodiversity score for the site.
Each of these pieces of information is obtained from the relevant
application or determination to create the native vegetation
credits.
The second iteration, in subclause (2), applies to a site that
contains biodiversity class areas. In effect, the formula requires
the same calculation under subclause (1) to be carried out for
each biodiversity class area rather than for the site as a whole.
The fact that a credit has been calculated under subclause (2) in
relation to a particular biodiversity class area will inform its
status as a "corresponding alternate credit" relative to other
credits created for the same biodiversity class area—see the
definition of that term in clause 3.
The results for each biodiversity class area then collectively form
the "general gain" for the purposes of clause 33(1).
Example
Assume that "general gain" is being calculated under this clause
for the site shown in Figure 1. As the site contains 4 biodiversity
class areas (or "BCAs"), the formula in clause 34(2) applies.
This formula requires a multiplication of the area of each BCA
by the potential gain for each BCA by the strategic biodiversity
score for each BCA, as indicated on the following page.
34
Biodiversity Class Area 1
Area (ha)
9·896
Potential gain
0·210
Strategic biodiversity score
0·579
General gain
1·203
Biodiversity Class Area 2
Area (ha)
12·786
Potential gain
0·331
Strategic biodiversity score
0·637
General gain
2·696
Biodiversity Class Area 3
Area (ha)
8·050
Potential gain
0·254
Strategic biodiversity score
0·623
General gain
1·274
Biodiversity Class Area 4
Area (ha)
2·011
Potential gain
0·191
Strategic biodiversity score
0·656
General gain
0·252
Clause 33(1) is then used translate the "general gain" into total
numbers of general biodiversity credits that may be created for
the site by multiplying the general gain by 1000, as follows.
General biodiversity credits created for the site
BCA 1
1,203
BCA 2
2,696
BCA 3
1,274
BCA 4
252
35
The table in the general notes relating to corresponding alternate
credits indicates which of the credits calculated in this example
would be corresponding alternate credits with each other.
Clause 35 provides the formula for calculating "specific gain" for the
purposes of clause 33(2). The formula is also required to be used
in calculations under clauses 31 and 40.
A "specific gain" can only be created for a site or biodiversity
class area for which a habitat importance score exists. If clause 5
applies to the application or determination to create the native
vegetation credits, the effect for the purposes of clause 35 is that
the formula only applies to those habitat importance scores that
exceed the threshold under clause 5.
There are effectively 4 iterations to the formula which apply
depending on—

whether the site has any biodiversity class areas; and

whether the site or biodiversity class area has one or
more than one habitat importance score or scores.
The question of whether a site has habitat importance scores and,
if so, the species to which they relate, is determined by reference
to the definition of habitat importance score in clause 3.
In effect, the regulations will specify how this is determined.
The first iteration of the formula, in subclause (1), applies to a
site that does not have any biodiversity class areas and that has
one habitat importance score. It requires a multiplication of—

the area of the site in hectares;

the potential gain for the site; and

the habitat importance score for the particular species of
rare or threatened flora or fauna that is identified for the
site.
As with the calculation of general gain under clause 34, each of
these pieces of information is obtained from the relevant
application or determination to create the native vegetation
credits.
The second iteration, in subclause (2), applies to a site that does
not have any biodiversity class areas and that has more than one
habitat importance score. The difference between this iteration
36
of the formula and that in subclause (1) is that a separate
calculation is carried out for each of the species for which there is
a habitat importance score. There will therefore be a "specific
gain" calculated for each of these species for the site.
The third and fourth iterations, in subclause (3), apply to a site
that contains biodiversity class areas. In particular, the third
iteration, in subclause (3)(a), applies to each biodiversity class
area that contains one habitat importance score. This is similar to
subclause (1) save that the result applies to the biodiversity class
area.
The fourth iteration, in subclause (3)(b), applies to each
biodiversity class area that contains more than one habitat
importance score. Like subclause (2), it requires a separate
calculation to be carried out for each of the species for which
there is a habitat importance score for each biodiversity class
area.
Under subclauses (2) and (3), the results for each species and
each biodiversity class area (as applicable) collectively form the
"specific gain" for the purposes of clause 33(2). In contrast, the
result under subclause (1) will relate to a single species and a
single area and will therefore singularly comprise the "specific
gain" for the site.
As a result of the definition of corresponding alternate credit in
clause 3—

any credits created as a result of the calculation of
specific gain under clause 35 will be corresponding
alternate credits with the general biodiversity credits
created for the same site or biodiversity class area (as
applicable); and

where credits for different relevant species (as that term
is defined in clause 3) are created in relation to the same
site or biodiversity class area (as applicable), those
credits will be corresponding alternate credits with each
other and with the general biodiversity credits created
for the same site or biodiversity class area.
Example
Assume that "specific gain" is being calculated under this clause
for the site shown in Figure 1. As the site contains 4 biodiversity
class areas, the formulae in clause 35(3) apply. These formulae
37
require a multiplication of the area of each BCA by the potential
gain for each BCA by the habitat importance score for each
species for each BCA, as indicated below.
Note that no calculation of specific gain is possible unless an
area has a habitat importance score for the relevant species.
For example, as there is no habitat importance score for BCA 1,
there is no specific gain for that area.
Biodiversity Class Area 1—no habitat importance scores
-
-
Biodiversity Class Area 2—habitat importance score for
Species A
Area (ha)
12·786
Potential gain
0·331
Habitat importance score,
Species A
0·760
Specific gain, Species A
3·216
Biodiversity Class Area 3—habitat importance score for
Species B
Area (ha)
8·050
Potential gain
0·254
Habitat importance score,
Species B
0·883
Specific gain, Species B
1·805
Biodiversity Class Area 4—habitat importance score for
Species A
Area (ha)
2·011
Potential gain
0·191
Habitat importance score,
Species A
0·769
Specific gain, Species A
0·295
38
Biodiversity Class Area 4—habitat importance score for
Species B
Area (ha)
2·011
Potential gain
0·191
Habitat importance score,
Species B
0·879
Specific gain, Species B
0·338
Clause 33(2) is then used translate the "specific gain" into total
numbers of specific biodiversity credits that may be created for
the site by multiplying the specific gain by 1000, as follows—
Specific biodiversity credits created for the site
BCA 1
Nil
BCA 2
-
for Species A
-
3,216
for Species B
-
1,805
-
for Species A
-
295
-
for Species B
-
338
BCA 3
BCA 4
The table in the general notes relating to corresponding alternate
credits indicates which of the credits calculated in this example
would be corresponding alternate credits with each other.
PART 5—NATIVE VEGETATION MANAGEMENT
AGREEMENTS WITH OWNERS OF PRIVATE LAND
Clause 36 provides the Secretary with a power to enter into a native
vegetation management agreement with an owner of private land.
Under subclause (1), an agreement may be made for any of the
purposes of the Act. This could include the general purpose of
contributing to Victoria's long-term biodiversity or the more
specific purpose of the creation of native vegetation credits on
private land under Part 2. In the latter context, clause 14 requires
39
an agreement to be entered into under Part 5 before native
vegetation credits can be created for private land.
The function of the agreement in the context of creating credits is
to secure the owner's obligations to protect and improve native
vegetation on the land that give rise to the potential gain on
which the credits are based.
Subclause (2) requires every native vegetation management
agreement made under clause 36 to contain—

any terms and conditions specified in the regulations;
and

any additional terms and conditions that are agreed
between the Secretary and the owner; and

a site management plan, which is defined in clause 3 as
a plan that specifies the requirements to improve and
maintain the native vegetation on the land, both during
the initial 10 years of the agreement and on an ongoing
basis.
Subclause (3) requires that, if the agreement is being entered into
as part of the creation of native vegetation credits, the site
management plan forming part of the agreement must be the
same as the site management plan included in the application
under clause 9. This requirement ensures that the obligations that
are ultimately secured under the agreement are the same as those
proposed in the application to create native vegetation credits,
effectively ensuring that the "potential gain" is required to be
delivered.
Subclause (4) specifies the types of matters that a native
vegetation management agreement may deal with, which are—

the management, improvement and protection of native
vegetation on the land; and

the ways in which the land may or may not be used; and

the activities that may or may not be carried out on the
land.
40
Subclause (5) provides that a native vegetation management
agreement commences after all of the following have occurred—

the parties have executed the agreement in writing;

in the case of an agreement being entered into as part of
the creation of native vegetation credits, any person
with a registered interest in the subject land has
consented in writing to the making of the agreement;

the owner of the land has paid any native vegetation
management agreement fee required under clause 39(1).
Subclause (6) specifies that a native vegetation management
agreement binds the parties and anyone who has consented to be
bound by the agreement.
Clause 37 provides for the recording of a native vegetation management
agreement on the title to the land under the Transfer of Land
Act 1958 in certain circumstances.
Subclause (1) confers a power on the Secretary to apply to the
Registrar of Titles (as that term is defined in clause 3) to record
any agreement. This power may be exercised where, for
example, the Secretary and the owner have agreed that the
circumstances of entry into the agreement warrant it binding
future owners (see clause 38).
Subclause (2) essentially removes any choice about recording the
agreement on title if the agreement has been entered into as part
of the creation of native vegetation credits for the land under
Part 2. Recording the agreement on title is mandatory in such
cases and results in the agreement binding successors in title
under clause 38. This is essential for the agreement to secure
the long-term protection of native vegetation on the land.
The process for creating credits reflects this whereby clause 14
does not permit the final steps in credit creation to be undertaken
until the agreement is recorded on title.
Subclauses (3) and (4) require the owner of land to pay certain
fees to the Secretary before the Secretary's power under
subclause (1) or duty under subclause (2) is enlivened, being—

any fee payable by the Secretary for the recording of the
agreement, such as an application fee under the
Transfer of Land Act 1958;
41

the native vegetation management agreement fee under
clause 39(1).
Subclauses (5) and (6) make provision for the recording of the
agreement on title by the Registrar of Titles.
Clause 38 specifies that an agreement, once recorded on title, runs with the
land and binds all successors in title to the owner of the land.
Clause 39 requires the owner of land who enters into a native vegetation
management agreement under Part 5 to pay to the Secretary a
native vegetation management agreement fee, should such a fee
be prescribed in the regulations. Under clause 36(5), this is
essentially a condition-precedent to the commencement of any
such agreement. It is also a prerequisite to the recording on title
of any agreement under clause 37.
If an agreement comes to an end within its first 10 years, a
pro-rated refund is payable to the person who paid the fee.
Clause 40 sets out the process and requirements for variation of a native
vegetation management agreement that relates to land for which
native vegetation credits are created. The Secretary may consider
a request for variation only when the owner makes an application
and pays an application fee to be set in the regulations.
Limitations apply to ensure that appropriate compensation is
provided for any reduction in improvements and protection for
native vegetation arising from a variation. The formulas in
clause 40 to achieve this compensation are conceptually identical
to those for the variation of vegetation improvement plans—
see clause 31.
Clause 41 provides that a native vegetation management agreement that
relates to land for which native vegetation credits are not created
can be varied on application by the owner of the land, with the
consent of the Secretary.
Clause 42 provides that, if an agreement that is varied is recorded on the
title to the land under the Transfer of Land Act 1958, the
Secretary must apply to the Registrar of Titles for the recording
on the title of a consolidated copy of the native vegetation
management agreement that incorporates the variation. As with
clause 37(3), the owner of the land is required to pay to the
Secretary any relevant fee.
42
Clause 43 sets out the process and requirements for the cancellation of a
native vegetation management agreement. The Secretary may
consider a request for cancellation only when the owner makes
an application (required by subclause (1)) and pays an application
fee to be set in the regulations (required by subclause (2)).
Similar in concept to the variation provision in clause 40, if the
agreement has been used as part of the creation of native
vegetation credits under Part 2, limitations apply to ensure that
appropriate compensation is provided for the reduction in
improvements and protection for native vegetation that will
invariably arise from the cancellation. The formula in this clause
differs from the variation formula in clause 40, as there is no
need to calculate the reduction—it is a given that the reduction
will be 100% of the protections and improvements provided for
in the agreement, because the agreement that requires them to be
delivered is being removed.
To achieve this, subclause (3) provides that, if the agreement is
made over land for which native vegetation credits have been
created, the Secretary may not cancel the agreement unless—


under subclause (3)(a), all remaining native vegetation
credits created for the land (that are not allocated and
have not been transferred) are cancelled under this
clause; and
under subclause (3)(b), to the extent that any credits
created for the land have been allocated or transferred
and therefore cannot be cancelled under subclause
(3)(a), equivalent credits are exhausted by either or both
of the means described in subclause (3)(b)(i) (allocation
of other credits) or (ii) (cancellation of other credits held
by the owner of the land).
Subclause (4) sets out the amounts of any allocation or
cancellation required under subclause (3)(b). Essentially, the
amounts must be equivalent to the amounts of any credits that
have been allocated or transferred from the original pool of
credits created for the site. An example is set out below.
Subclause (5) provides that if native vegetation credits are
allocated for the purposes of subclause (4), the same proportion
of corresponding alternate credits of those being allocated are
43
cancelled. This ensures that the value of the credits being
allocated is only used once.
Similarly, subclause (6) provides that if an amount of native
vegetation credits is cancelled for the purposes of subclause (4),
the same proportion of corresponding alternate credits of those
being cancelled is also cancelled.
Subclause (7) applies to the cancellation of native vegetation
management agreements that were made for purposes other than
the creation of native vegetation credits. If such an agreement
was made to offset the removal, lopping or destruction of native
vegetation (which, for example, could be on the same land where
the removal, lopping or destruction occurs), the Secretary must
not cancel the agreement unless equivalent protections or
improvements for native vegetation are provided. The clause
does not restrict the manner in which such equivalency can be
provided.
Subclause (8) provides for when the cancellation of a native
vegetation management agreement under this clause takes effect.
Example
Assume that an owner of land for which native vegetation credits
have been created applies to the Secretary to cancel the native
vegetation management agreement under this clause. The site,
Site A, has identical features to the site discussed in the example
in clause 31 and as such 3 types of credits were created for the
site, all of which are corresponding alternate credits with each
other: 1500 general biodiversity credits; 900 specific biodiversity
credits, Species A; and 750 specific biodiversity credits,
Species B.
Also assume that the owner of the land has at some stage
transferred 900 of the general biodiversity credits, resulting in a
"balance" of credits created in relation to Site A of 600 general
biodiversity credits and, as a result of clause 70(2), 360 specific
biodiversity credits, Species A, and 300 specific biodiversity
credits, Species B. In this context—

Subclause (3)(a) requires the owner of the land to
cancel, under this clause, the remaining 600 general
biodiversity credits, 360 specific biodiversity credits,
Species A, and 300 specific biodiversity credits,
Species B.
44

Subclause (3)(b) requires the owner to "compensate"
for the 900 general biodiversity credits already
transferred. The owner can achieve this under
subclause (3)(b) by acquiring (if necessary) and
allocating or cancelling native vegetation credits, or by
a combination of both.

Subclause (4) specifies what type of credits may be
allocated or cancelled for this purpose—as noted above,
the owner must provide compensation equivalent to any
credits that have been transferred or allocated from the
site. In this case, given that the owner has transferred
900 general biodiversity credits from the site, the owner
must allocate or cancel a total of 900 general
biodiversity credits.

The owner chooses to acquire and, under this clause,
allocate 900 general biodiversity credits.

The 900 general biodiversity credits were acquired from
the market. They were originally created for Site B and
have corresponding alternate credits for Species C and
Species D. By operation of clause 70(2), the owner
acquired these credits too. However, under subclause
(5), these corresponding alternate credits are cancelled
upon the allocation being made for the purposes of
subclause (3)(b).

Based on the above, the Secretary may now cancel the
native vegetation management agreement and apply for
removal of the recording of the agreement from the
Land Register under clause 44.
Clause 44 provides that if an agreement that is cancelled is recorded on the
title to the land under the Transfer of Land Act 1958, the
Secretary must apply to the Registrar of Titles for the recording
to be removed from the Register under that Act. As with
clause 37(3), the owner of the land is required to pay to the
Secretary any relevant fee.
Clause 45 requires the owner of the land to notify the Registrar of Native
Vegetation Credits of any cancellation or allocation made under
clause 40 or 43. The Registrar is then required to make the
necessary recording in the Native Vegetation Credit Register.
45
PART 6—NATIVE VEGETATION CREDIT REGISTER
Division 1—Native Vegetation Credit Register
Clause 46 imposes an overarching responsibility on the Minister to keep a
Register of native vegetation credits. Clause 3 defines this as the
"Native Vegetation Credit Register".
Division 2—Registrar and staff
Clause 47 provides that a Registrar must be employed. The Registrar must
be a public servant under Part 3 of the Public Administration
Act 2004. Clause 3 defines the Registrar as the "Registrar of
Native Vegetation Credits".
Clause 47 also enables other public servants to be employed to
assist the Registrar.
Clause 48 specifies that the Registrar of Native Vegetation Credits has the
following functions—

to maintain the Native Vegetation Credit Register; and

to provide information from the Native
Vegetation Credit Register in accordance with Part 6
(see clauses 54−58); and

to keep records of historical transactions (such as
allocations and transfers); and

to approve forms for the purposes of the Bill.
Clause 49 enables the Registrar to delegate powers, functions and duties to
public servants who are employed to assist the Registrar under
clause 47. This will enable such persons to usefully assist the
Registrar by exercising the Registrar's formal powers in
accordance with any delegation.
Division 3—Records
Clause 50 sets out the records and information that the Registrar of Native
Vegetation Credits must include in the Native Vegetation Credit
Register. The information includes the details of the holder of
the credit, the transaction history for the credit, the nature and
attributes of the credit (as that term is defined in clause 3) and
other information relating to the creation of the credit.
46
The credits in relation to which these records must be kept are—

those created under the Bill, to which subclause (1)
refers; and

any "pre-existing credits"—see clause 132.
Limited parts of this information are publicly available—
see clause 55.
The Bill requires the records on the Native Vegetation Credit
Register to include the native vegetation management agreement,
given the key role of the agreement in the creation of native
vegetation credits under the Bill. However, the agreement is not
publicly available from the Native Vegetation Credit Register.
It will only be available publicly from the Land Register under
the Transfer of Land Act 1958. Part 5 of the Bill requires that
any such agreement entered into for the purpose of the creation of
native vegetation credits must be on the Land Register and any
variation or cancellation must be reflected in that Register.
Clause 51 provides a mechanism for the recording of a personal legal
representative as the holder of a credit upon the death of its
holder. In circumstances where clause 72 applies, the mechanism
in clause 51 may not be necessary as clause 72 would
automatically transfer the credits to the personal legal
representative, upon the personal legal representative becoming
the legal owner of the land. For example, this would be the case
upon the vesting of land in an administrator or executor under
section 13 of the Administration and Probate Act 1958.
Clause 52 provides a mechanism for the recording of a survivor of a joint
holding as the holder of a credit upon the death of any other
person recorded as joint holder of a credit. In circumstances
where clause 72 applies, the mechanism in clause 52 may not be
necessary as clause 72 would automatically transfer the credits to
the survivor, concurrently with the survivor assuming ownership
of the deceased's interest in the land under that clause.
Clause 53 provides a mechanism for the recording of a trustee in
bankruptcy as the holder of a credit upon the trustee satisfying
the Registrar that the trustee has authority to control a bankrupt
holder's affairs. In circumstances where clause 72 applies, the
mechanism in clause 53 may not be necessary as clause 72 would
automatically transfer the credits to the trustee, concurrently with
47
the trustee becoming the legal owner of the land under that
clause.
Division 4—Access to information in the Native Vegetation Credit
Register
Clause 54 provides the Secretary with a right to access the Native
Vegetation Credit Register for the purposes of carrying out the
Secretary's functions under the Bill.
Clause 55 provides for certain information on the Native Vegetation Credit
Register to be publicly available. The information is available
via the search process set out in clause 58.
Clause 55 provides that the name and address of the holder, the
nature and attributes of the credits, the transfer and allocation
history and any current suspension and cancellation are publicly
available.
If any additional information is kept on the Register as a result of
regulations made under the Bill, that information may be also be
publicly available under clause 55 if the regulations specify that
to be the case.
Clause 56 provides a mechanism for the suppression and management by
the Registrar of personal information (such as name and address)
from the Native Vegetation Credit Register in exceptional
circumstances.
Clause 57 provides a mechanism for any person affected by a decision of
the Registrar as to the suppression and management of personal
information under clause 56 to have that decision reviewed by
VCAT.
Clause 58 sets out how a person may search the publicly available
information on the Native Vegetation Credit Register. In effect,
any person may apply to the Registrar for current or historical
information in an approved form and upon payment of any
prescribed fee. The publicly available information is the
information referred to in clause 55, excluding any information to
which access is restricted under clause 56.
48
Division 5—Correction and amendment of the Native Vegetation
Credit Register
Clause 59 empowers the Registrar to correct, amend or delete any recording
provided the Registrar is satisfied that this is necessary to reflect
the current status of a record. Correction or amendment must
also be made if required by legislation or a court or tribunal
order. Correction or amendment may be by way of adding,
altering, cancelling or deleting a recording or particulars
contained in a recording or changing names and addresses.
Correction may be made on the Registrar's own initiative or on
application.
Clause 60 requires the Registrar to notify a person recorded as the holder of
a credit if, on its own initiative, the Registrar has corrected a
substantial error in relation to that credit.
Division 6—General
Clause 61 empowers the Registrar to require a person seeking a recording in
the Register to satisfy the Registrar as to the person's identity.
It empowers the Registrar to refuse to make a recording if the
Registrar is not so satisfied. It also provides a mechanism for
third party verification.
PART 7—ALLOCATION OF NATIVE VEGETATION
CREDITS
Clause 62 provides a definition of planning decision maker for the
purposes of Part 7. It essentially means the body administering
an offset condition. It is used in clauses 67 and 68.
Clause 63 provides the holder of a native vegetation credit with a right to
allocate that credit for certain purposes. Allocation can be to
meet an offset condition (as that term is defined in clause 3), for a
philanthropic purpose or for any other purpose prescribed in the
regulations.
In the case of an allocation by any person other than the Minister,
an allocation to satisfy an offset condition may only be in respect
of an offset condition with which the holder of the credit is
required to comply. This effectively means that, if a person other
than the holder is required to comply with the offset condition
49
and wishes to allocate the credit to that condition, the credit must
first be transferred to that person under Part 8.
In the case of an allocation by the Minister, an allocation to
satisfy an offset condition may be for an offset condition with
which the Crown land manager, another Minister or a public
authority is required to comply. This enables the Minister (as the
default holder of credits created for Crown land under Part 3) to
facilitate compliance with offset conditions by other parts of
government, where appropriate, without needing to first transfer
the credits.
There are several consequences to an allocation under the Bill.
These are—

the credits cannot be allocated again—see clause 65;

as their value is effectively exhausted under clause 65,
the credits can no longer be transferred (see clause 73)
or suspended or cancelled (see Part 9);

all corresponding alternate credits of the credits that
have been allocated are cancelled—see clause 66.
Clause 64 requires the holder of a credit allocated under clause 63 to notify
the Registrar of Native Vegetation Credits so that the Registrar
can update the Native Vegetation Credit Register under Part 6.
The allocation is not effective until recorded on the Register.
This effectively means that any person or body seeking to rely on
the allocation of credits (for example, a body administering an
offset condition) will always be able to verify whether an
allocation has occurred by seeking that information from the
Register under Part 6.
Clause 65 enshrines the principle that a credit may only be "used once" by
preventing the allocation of credits that are—

already allocated; or

corresponding alternate credits of a credit that is being
allocated, if that credit would be cancelled under
clause 66.
Clause 65 also prevents the allocation of credits that are
suspended or cancelled (see Part 9).
50
Clause 66 provides that the same proportion of the corresponding alternate
credits of credits that are being allocated under clause 63 is
cancelled upon the allocation occurring. This reflects the
relationship of interdependence between corresponding alternate
credits, which exists to ensure that the environmental value of
native vegetation credits is only used once. The Registrar is
required by clause 64 to record the cancellation arising under
this clause.
For example, if—

50 general biodiversity credits were created for a site
together with 20 specific biodiversity credits, Species A;
and

these were corresponding alternate credits with each
other; and

the holder of the credits allocated 25 general
biodiversity credits under clause 63 (being 50% of the
general biodiversity credits)—
clause 66 would require that 10 of the specific biodiversity
credits, Species A, be cancelled. This is the same proportion
(50%) of the specific biodiversity credits, Species A, as the
proportion of general biodiversity credits allocated under
clause 63.
Clause 67 permits an allocation to be reversed in limited circumstances.
This clause applies only to credits that are created under Part 2 of
the Bill or created under Part 3 and which were not allocated by
the Minister (clause 68 deals with reversal of allocation of such
credits).
In the case of an allocation to meet an offset condition, the
Secretary may only approve the reversal of the allocation if
satisfied that the allocation was not relied upon as a basis for the
removal, destruction or lopping of any native vegetation and the
planning decision maker (as that term is defined in clause 62)
confirms that the allocation is no longer required.
For an allocation for a purpose prescribed in the regulations, the
Secretary may approve the reversal of an allocation if the
regulations prescribe corresponding circumstances in which such
an allocation is to be reversible.
51
It is not intended that an allocation for a philanthropic purpose be
reversible and as such the Secretary does not have the power to
approve such a reversal under clause 67.
Clause 68 is essentially a counterpart to clause 67, in relation to native
vegetation credits created in relation to Crown land that were
allocated by the Minister. The main difference is that it does not
involve an application to the Secretary.
It is conceivable that the Minister may hold native vegetation
credits created under Part 2 of the Bill, to which clause 67 applies
(for example, if the Minister purchased the credits as a market
participant). If reversal of such a credit were required, the
Minister would, as with any other market participant, seek
reversal under clause 67.
Clause 69 requires any reversal of allocation under clause 67 or 68 to be
notified to the Registrar of Native Vegetation Credits and for the
Registrar to update the Native Vegetation Credit Register
accordingly.
PART 8—TRANSFER OF NATIVE VEGETATION CREDITS
Part 8 establishes the circumstances in which the holder of a native
vegetation credit may transfer the credit. Until such time as a credit has been
transferred for the first time, there is a series of limitations on the right to
transfer the credit. Once that first transfer has occurred, a credit may be
transferred generally without limitation.
The limitations on the right to transfer a credit for the first time reflect the
interrelationship established by the Bill between—

in the case of private land, the ownership of land, the
obligations to improve and maintain vegetation under a native
vegetation management agreement, the costs associated with
those obligations and the consideration received for the transfer
of a credit; and

in the case of Crown land to which a vegetation improvement
plan applies, the management of the land, the obligations to
improve and maintain vegetation under a vegetation
improvement plan, the costs associated with those obligations
and the consideration received for the transfer of a credit.
52
The Bill essentially requires the consideration for the first transfer of a native
vegetation credit to—

be approximate to the reasonable costs to an owner of land or
Crown land manager of complying with the requirements of
the site management plan (which forms part of the native
vegetation management agreement entered into under Part 5
when the credits were created under Part 2) or vegetation
improvement plan (made under Division 5 of Part 3)
respectively; and

be subject to an approval process (in Part 8) to verify the
above; and

once approved, be paid into the Native Vegetation Credit Fund
(see Part 10).
Once the consideration is paid into the Fund, the owner of the land or the
Crown land manager (as applicable) is entitled to progress payments over a
period of time, under and in accordance with Part 10, subject to compliance
with annual reporting obligations under Part 11 (see clauses 94 and 95).
This requirement only applies within the first 10 years after the credits are
created, as this is when a landowner or Crown land manager will generally
have the highest costs in improving the vegetation on the site. Beyond the
first 10 years, there is no requirement for first transfers to be approved, there
are no annual progress reports and the progress payments under Part 10 will
have ceased. The requirement does not apply to credits created on Crown
land for which no vegetation improvement plan is in force.
In relation to private land, this framework brings about a nexus between the
owner of the land, as the person who must comply with the native vegetation
management agreement, and the first transfer of a credit, as the consideration
negotiated for that credit's first transfer is payable from the Fund to the owner
of the land under Part 10. Until such time as the first transfer occurs, Part 10
requires this nexus to be maintained by providing that the credits transfer
automatically if the land is transferred (see clause 72).
Once a credit has been transferred for the first time and the associated
consideration paid into the Fund, the consideration for subsequent transfers is
not regulated by the Bill and there is no longer a nexus between the holder of
the credit and the owner of the land. The protections and improvements to
the land continue, as the owner of the land will be required to comply with
the native vegetation management agreement under Part 5 despite having
transferred the credit; conversely, the new holder of the credit is not obliged
to comply with those obligations.
53
Clause 70 provides the holder of a native vegetation credit with a right to
transfer the credit to any person, subject to the limitations as set
out in Part 8.
If the credits being transferred have corresponding alternate
credits, the same proportion of the corresponding alternate credits
is also transferred, reflecting the interdependence between
corresponding alternate credits as discussed in the general notes,
and the notes to clause 66.
For example, if—

50 general biodiversity credits were created for a site
together with 20 specific biodiversity credits, Species A;
and

these were corresponding alternate credits with each
other; and

the holder of the credits transferred 25 general
biodiversity credits under clause 70(1) (being 50% of
the general biodiversity credits)—
clause 70(2) would require that 10 of the specific biodiversity
credits, Species A, also be transferred to the same transferee.
As with the example in the notes to clause 66, this is the same
proportion (50%) of the specific biodiversity credits, Species A,
as the proportion of general biodiversity credits transferred under
clause 70(1).
Clause 71 provides that a transfer must indicate the monetary consideration
for the transfer, if any. This serves 2 purposes: to provide market
sales data to help prospective buyers make informed decisions
(see clause 55(c)), and for the purposes of clauses 75 and 76.
Clause 72 establishes the nexus between credits that have not been
transferred and private land discussed in the introductory notes to
Part 8. It provides that credits are automatically transferred to
any person to whom the land is transferred if the credits are
effectively unused, that is, still in the landowner's ownership and
not allocated.
The primary rationale behind this provision is to ensure that there
is a logical connection between the holder of the credits and the
future sale of those credits. Under clause 75(5), when credits are
transferred for the first time, the consideration for the transfer
(essentially the proceeds of sale) is deposited into the Fund and
54
paid to the owner of the land in accordance with Part 10 as
progress payments for work done to or on the land. This aspect
of the Bill effectively "ties" the sale proceeds to the land in
relation to which the credits were created. It would therefore not
be appropriate to permit the land to be transferred to a new owner
without also transferring the credits, as this would create an
illogical situation whereby the holder of the credits would have
no entitlement to the proceeds of sale of the credits.
The primary rationale is only relevant to the first 10 years after
which native vegetation credits have been created, because this is
the period during which the mechanisms in clause 75 and Part 10
apply. Beyond that period, if any native vegetation credits are
transferred for the first time, the proceeds of sale are not required
to be deposited into the Fund and are therefore no longer "tied" to
the land. Despite this, clause 72 will continue to require that the
unsold credits are automatically transferred with the land even
beyond the first 10 years. This effectively provides the new
owner of land with the option as to whether to continue to hold
the credits and/or transfer them or seek to cancel them and reduce
his or her obligations under the native vegetation management
agreement.
The clause does not apply to credits that have already been
allocated as they cannot be further transferred—see clause 73.
Clause 86 requires a transferee of land to notify the Registrar of
Native Vegetation Credits of any automatic transfer under
clause 72, so that the Registrar may update the Native Vegetation
Credit Register.
Clause 73 reflects the principle that a credit may only be "used once" by
preventing the transfer of credits that are allocated under Part 7.
Clause 74 prevents the transfer of a credit that is suspended or cancelled, as
it is not able to be allocated under Part 7 and is of no value while
suspended or cancelled.
Clause 75 sets out the mechanism through which the Bill establishes the
relationship between the ownership of land, the obligations to
improve and maintain vegetation under a native vegetation
management agreement, the costs associated with those
obligations and the consideration received for the transfer of a
credit, as discussed in the introductory notes to Part 8.
55
Subclause (1) effectively requires the first transfer of any native
vegetation credit to be subject to an approval process if the
transfer occurs during the first 10 years since the relevant native
vegetation management agreement commenced. The approval
process does not apply after the first 10 years given that progress
payments from the Fund cease under Part 10 beyond the first
10 years.
Subclause (2) requires the person seeking to transfer the credit to
provide the Secretary with the consideration received for the
transfer (that is, the sale proceeds), together with a range of other
information. Notably, the person must provide the Secretary
with the estimate, prepared by a qualified assessor, of the
reasonable costs of carrying out the requirements specified in
the site management plan that is required under clause 9(3)(d).
The purpose of this requirement is to enable the Secretary to
assess whether the consideration received bears a sufficiently
close resemblance to the cost to an owner of the land of meeting
the requirements of the site management plan (which forms part
of the native vegetation management agreement).
If the consideration is at least a prescribed percentage of the
estimate under clause 9(3)(d) and the other requirements are met,
the Secretary must approve the transfer under subclause (5) and
deposit the consideration into the Fund.
If the consideration is non-monetary, or is less than the
prescribed percentage of the estimate under clause 9(3)(d), the
Secretary may under subclause (3) request further information
from the applicant. The purpose of this exercise is to enable the
Secretary to be satisfied that, despite the consideration being less
than the prescribed percentage, that there is adequate means for
the landowner to meet the requirements of the native vegetation
management agreement.
If the Secretary is satisfied after receiving further information
under subclause (3), the Secretary must approve the transfer
under subclause (5) and deposit the consideration into the Fund.
If the Secretary is not satisfied after receiving further information
under subclause (3), it may, under subclause (4), reject the
application outright or request that the consideration be varied.
If the Secretary requests for the consideration to be varied,
subclause (6) enables the applicant to resubmit the application
or withdraw it.
56
Subclause (7) requires the Secretary to return any consideration
provided for rejected or withdrawn applications.
Clause 76 is essentially a counterpart to clause 75 in relation to native
vegetation credits created in relation to Crown land that is subject
to a vegetation improvement plan where the credits are held by
the Minister. The main difference between clauses 75 and 76 is
that clause 76 does not involve an application to the Secretary.
Clause 77 sets out how to effect a transfer of a native vegetation credit to
which neither clauses 75 nor 76 apply. Essentially, the transfer
may be effected by the provision of an application to record the
transfer to the Registrar of Native Vegetation Credits.
Provided that an application meets the formal requirements of
this clause, the Registrar has no discretion to refuse the
application—this reflects a holder's right to transfer credits as
espoused by clause 70.
The provision enables applications to be lodged by a transferor or
the transferor's agent. The reference to agents is intended to
permit dealings to be lodged by authorised persons such as credit
brokers.
Clause 78 requires the Registrar of Native Vegetation Credits to record in
the Register any transfer that is the subject of an approved
application under clause 75, that is made under clause 76 or that
is the subject of an application under clause 77.
Such a transfer is not effective until it is recorded in the Native
Vegetation Credit Register. This effectively means that any
person or body seeking to rely on the fact that a person is the
holder of credits should be able to verify whether the person is
the holder by seeking that information from the Register under
Part 6.
57
PART 9—SUSPENSION AND CANCELLATION OF NATIVE
VEGETATION CREDITS
Division 1—Suspension of native vegetation credits
Division 1 of Part 9 sets out one of the bases upon which native vegetation
credits may be suspended. Native vegetation credits may also be suspended
as a consequence of certain enforcement steps under Part 11—see clause 111.
Clause 79 provides that the Secretary may suspend native vegetation credits
if the Secretary has a reasonable suspicion that the credits were
created based on false or misleading information supplied under
clause 9 or 20. The immediate effect of suspension is that the
credits cannot be allocated or transferred—see clauses 65 and 74.
This mechanism aims to ensure that native vegetation credits are
not used while there is doubt over the veracity of information that
led to their creation.
Subclause (2) provides that the power to suspend cannot be used
if—

the credits have been transferred and are now held by a
person other than the owner of the land; or

the credits are allocated.
This limitation ensures that buyers of native vegetation credits
are not liable to have their credits suspended.
The purpose of the suspension is for the Secretary to investigate
the suspicion referred to in subclause (1) with a view to
substantiating it. Subclause (3) requires the Secretary to notify
the holder of the suspension and state the grounds.
Subclause (4) requires the Secretary to investigate—this could
include, among other things, entering the site under Part 11 to
verify any of the information about the site that was included in
the application under clause 9 or 20.
Subclause (5) provides a 28−day time limit on the investigation,
after which the Secretary must either take action to cancel the
credits under clause 81 or lift the suspension.
If proceeding to take action to cancel the credits, the Secretary
must notify the holder under subclause (6) and provide the
grounds in a notice under subclause (7).
58
The holder of the credits will then have a 28−day period in which
to make submissions to the Secretary regarding the proposed
cancellation.
Clause 81 provides for the subsequent steps in this process.
Clause 80 requires the Secretary to notify the Registrar when native
vegetation credits are suspended under clause 79 and when that
suspension is lifted under clause 79 or 81. The Registrar must, in
turn, record the suspension (or its lifting) in the Native
Vegetation Credit Register.
The clause also provides that a suspension (or its lifting) is not
effective until such time as it is recorded in the Register.
This effectively means that any person or body seeking to
allocate or transfer a native vegetation credit (which is not
permitted if the credit is suspended) may verify whether the
credit is suspended by seeking that information from the Register
under Part 6.
Division 2—Cancellation of native vegetation credits
Clause 81 specifies what happens after the Secretary advises the holder of
credits under clause 79(6) that it intends to cancel the credits.
The Secretary must consider any submissions received under
clause 79(7) and decide whether or not to cancel the credits
within a further 28−day decision-making period. If the credits
are not cancelled, the Secretary must lift the suspension
(requiring the Secretary to notify the Registrar under clause 80).
If the Secretary cancels the credits, it must notify the holder of
the credits under subclause (3) and the Registrar under clause 83.
Clause 82 provides the Secretary with a power to cancel native vegetation
credits as a consequence of a failure by a landowner to comply
with directions (relating to compliance with a native vegetation
management agreement) given under clause 110. The provision
only applies to certain credits—see clause 111.
The purpose of this provision is twofold. First, it facilitates the
removal from the market of native vegetation credits in relation
to which there is an enduring compliance issue with the relevant
native vegetation management agreement. Second, it provides an
incentive for a person to comply with directions given under
clause 110.
59
The Bill does not provide a means to reverse the cancellation of
native vegetation credits; however, VCAT may make a range of
orders under Part 11, which may extend to the reversal of a
cancellation if VCAT considers it appropriate in the
circumstances.
Clause 83 requires the Secretary to notify the Registrar when it cancels a
native vegetation credit under Division 2 of Part 9 so that the
Registrar can update the records and information in relation to
that credit.
The clause also provides that a cancellation is not effective until
such time as it is recorded in the Register. This effectively means
that any person or body seeking to allocate or transfer a native
vegetation credit (which cannot occur if the credit is cancelled)
may verify whether the credit is cancelled by seeking that
information from the Register under Part 6.
PART 10—NATIVE VEGETATION CREDIT FUND
Part 10 establishes the Fund, into which payments of certain consideration
are made under clauses 75 and 76 (see Part 8) and out of which progress
payments are made to landowners and Crown land managers in accordance
with Division 3 of Part 10.
Division 1—Native Vegetation Credit Fund
Clause 84 provides that the Native Vegetation Credit Fund is established in
the Public Account as part of the Trust Fund under the Financial
Management Act 1994. Clause 3 defines this as the Fund.
Clause 85 provides that the Fund is comprised of the consideration paid into
the Fund under clauses 75 and 76 and any money derived from
any investment of the Fund. Money in the Fund may be invested
under the Financial Management Act 1994.
Division 2—Notification of transfer of land
Clause 86 requires that, if private land for which native vegetation credits
have been created is transferred, the transferee must notify the
Secretary of the transfer. The transferee must also notify the
Registrar of Native Vegetation Credits of any credits created for
the land that are transferred under clause 72(1).
60
This notice effectively entitles the transferee as the new owner to
receive any payments in relation to the land under Division 3.
The Secretary is not required to pay the new owner (as opposed
to the old owner) if the Secretary does not know about the
transfer, either by way of the notice being provided as required
by this clause or by reason of the new owner submitting an
annual report under Division 2 of Part 11.
Division 3—Payments from the Fund
Clause 87 provides that, subject to Division 3, money may be paid out of
the Fund to owners of private land or Crown land managers if
they have met applicable requirements in relation to the land they
own or manage (as the case may be). Clauses 88 to 91 specify
the detail as to when and how this may occur.
Money may also be paid out of the Fund in other
circumstances—see clause 92.
Clause 88 provides for an initial payment to be made from the Fund to an
owner of land when the owner transfers native vegetation credits
for the very first time. The right to payment is triggered when
the Secretary approves a transfer of native vegetation credits
under clause 75. The consideration for the transfer will be
deposited into the Fund under that clause and the payment will be
based upon that consideration in accordance with a formula to be
prescribed in the regulations.
The right to payment is conditional. The first condition is that it
is only available once. Paragraph (a) precludes a payment being
made under clause 88 if there has already been such a payment or
a payment under clause 89 arising from any transfer of credits
created for the same site.
The second and third conditions, specified in paragraphs (b) and
(c), require the owner of land to be in compliance with the
owner's reporting obligations under Division 2 of Part 11.
If clause 75 does not apply to the transfer (for example, if the
first transfer is made after the 10−year period referred to in clause
75(1)(b)), the Bill will not require the consideration to be paid
into the Fund and it will be dealt with as the transferor and
transferee agree. There is therefore no payment under this clause
in relation to such a transfer.
61
Clause 89 provides for subsequent payments to be made from the Fund to
an owner of land. In broad terms, the right to payment is
triggered when the owner has met all applicable requirements of
the native vegetation management agreement and provided an
annual report under Division 2 of Part 11.
In particular, clause 89 provides that an owner of land is entitled
to a payment in relation to the submission of each annual report
that the owner is required to submit under clause 94(1), provided
that—

under subclause (1)(a), a native vegetation credit has
been transferred and consideration has been paid into
the Fund under clause 75—this ensures that there is
money in the Fund from which the payment can be
made; and

under subclause (1)(b), the owner of the land has
submitted any annual report that the owner is required
to submit—this effectively means that any outstanding
reports from prior years must be provided before any
payment is made; and

under subclause (1)(c), the Secretary has accepted the
report (and any prior reports) under clause 94(5)
or (6)—this ensures that the payment is not made unless
the reports are satisfactory; and

under subclause (1)(d), subject to subclause (1)(e) (see
below), the owner has met all requirements of the native
vegetation management agreement that are required to
be met at the time of payment, both during the year to
which the most recent report under clause 94 relates and
in any preceding years.
Subclause (1)(e) effectively provides that an owner may still be
entitled to payment if the owner has not met all requirements of
the native vegetation management agreement, if the failure to
meet a requirement is due to exceptional circumstances beyond
the owner's control during the most recent reporting year.
Under subclause (2), the entitlement to payment under clause 89
is conditional upon all outstanding requirements being met by the
end of the 11th year since the native vegetation management
agreement commenced. If the requirements are not met by the
62
end of the 11th year, the money in the Fund is effectively
forfeited and becomes "unpaid consideration"—see clause 92.
Given that the entitlement to a payment is linked to the provision
and acceptance of an annual report under clause 94 and those
reports are only required for a period of 10 years beginning on
the day the native vegetation management agreement for the site
came into effect, the entitlement to payment ceases with the
reporting obligations. If an owner of land has not transferred any
credits within the 10−year period, they will not receive payments
under clause 89 (and there will not be any requirement under
clause 75 to deposit any consideration into the Fund).
The amount of each payment under clause 89 is to be determined
according to a formula prescribed in the regulations. It is
intended that the payment formula may make provision for the
calculation of payments to include any money derived from any
investment of the Fund.
It should be noted that, while subclause (1) requires the owner of
the land to have submitted a report required by clause 94, there is
no requirement in clause 89 for that report to have been
submitted within the timeframes required by clause 94. As such,
it would be possible for an owner of land to submit reports for
several past years at once, then receive the entitlement under
clause 89, subject to meeting the conditions in clause 89.
It would not be possible to submit reports "in advance" and
receive early payment due to the need for reports to demonstrate
compliance with relevant requirements during each year to which
the reports relate—see clause 94.
Clause 90 provides for an initial payment to be made from the Fund to a
Crown land manager when the Minister transfers native
vegetation credits to which clause 76 applies. The consideration
for the transfer deposited into the Fund under clause 76 will form
the basis for the payment in accordance with a formula to be
prescribed in the regulations.
As with clause 88 in relation to private land, the right to payment
is conditional: it is only available once and is subject to the
Crown land manager's compliance with reporting obligations
under Division 2 of Part 11.
63
Clause 91 provides for subsequent payments to be made from the Fund to a
Crown land manager. The right to payment is triggered when a
series of requirements, set out in subclause (1), is met.
The requirements are essentially the same as those in clause 89
except that they apply to Crown land managers.
Clause 92 sets out what may be done with money contributed to the Fund
under clauses 75 and 76 that is not paid to owners of land or
Crown land managers under clauses 88 to 91. If a landowner has
met all the relevant requirements for payment under clauses 88
and 89 within the time period referred to in those clauses, all
money in the Fund contributed by that landowner will be paid to
the landowner. However, under clauses 89 and 91, if some
requirements have not been met as at the end of the 11th year, the
entitlement to payment ceases and the money becomes "unpaid
consideration" under this clause.
Unpaid consideration may be applied—

in relation to unpaid consideration arising from private
land, to contribute to the Secretary's costs of carrying
out works under clause 112; or

in any case, towards any other purpose approved by the
Minister that is related to biodiversity conservation.
PART 11—REPORTING, COMPLIANCE AND
ENFORCEMENT
Division 1—Preliminary
Clause 93 sets out definitions of commencement day and identification for
the purposes of Part 11.
Division 2—Reporting obligations
Clause 94 sets out the annual reporting requirements for owners of land to
which a native vegetation management agreement applies.
The reporting requirements are relevant to the owner's
entitlement to any payments under clauses 88 and 89.
64
Subclause (1) requires the owner of land to submit an annual
report in accordance with the requirements of clause 94 every
year for 10 years after the day on which the native vegetation
management agreement commenced (which is the
"commencement day" defined in clause 93).
It is an offence not to comply with subclause (1). The maximum
penalty is 5 penalty units.
Subclause (2) specifies that each report must contain—

details of the requirements of the native vegetation
management agreement that are required to be met
during the year to which the report is relevant; and

a statement as to whether those requirements have been
met and, if so, how; and

photographs that evidence the work carried out in
meeting those requirements.
Subclause (3) specifies that each report is due with the Secretary
60 days after the end of each year (from the anniversary of the
commencement day). Subclause (3) also requires the report to be
in the form approved by the Secretary.
Subclause (4) creates an offence of providing false or misleading
information in a report. The maximum penalty is 60 penalty
units.
Subclause (5) sets out what the Secretary must do upon receipt of
a report under subclause (1). The Secretary must accept the
report unless the Secretary is satisfied that the owner has not met
all relevant requirements of the agreement. When the Secretary
accepts a report, the owner of the land may be entitled to a
payment under clauses 88 or 89.
Generally, if a report under this clause discloses that not all
relevant requirements have been met, the Secretary would reject
the report—this is reflected in subclause (5). However, subclause
(6) confers on the Secretary a discretion to accept a report even in
these circumstances if the Secretary considers that the noncompliance has arisen due to extraordinary circumstances beyond
the control of the owner that occurred during the year to which
the report relates.
Subclause (7) requires the Secretary to notify the landowner if
the Secretary rejects a report.
65
Clause 95 sets out the annual reporting requirements for Crown land
managers of land to which a vegetation improvement plan
applies. The provision is broadly similar to clause 94 in relation
to private land save that it does not include the offences that
apply to owners of land.
Clause 96 establishes an annual, public reporting process in relation to the
management of Crown land on which native vegetation credits
have been created. The report is to form part of the annual report
of the Department of Environment and Primary Industries under
the Financial Management Act 1994 (which the Minister is
responsible for preparing) and is required to be tabled in
Parliament under section 46 of that Act.
The clause requires the Minister(s) responsible for the
management of Crown land over which native vegetation credits
have been created to prepare a report in relation to each financial
year setting out 2 key types of information.
The first is an assessment of the progress towards meeting the
requirements of vegetation improvement plans during the
financial year, required under subclause (4)(a).
The second is an indication of whether there has been any
alteration to the reservation status of any Crown land over which
native vegetation credits have been created, required under
subclause (4)(b). Although the Bill does not facilitate changes to
the reservation status of such land, changes are nevertheless
theoretically possible, for example, through future legislation.
Subclause (4)(c) requires the Minister to offer an explanation in
the report as to whether any such change is likely to result in
reduced protection for native vegetation on the land and, if it is,
to provide details of the compensatory steps, if any, that the
Minister proposes to take. For example, the Minister may choose
to acquire and allocate native vegetation credits if a change in
reservation resulted in a complete removal of protection for the
vegetation on the land. It should be noted that the Bill does not
compel the Minister to take any such steps and it would always
remain a matter for the Minister's unfettered discretion.
Clause 97 provides the Secretary with a power to request an owner of land
to which a native vegetation management agreement applies to
provide the Secretary with a report at other times, after the annual
reporting obligation in clause 94 has ceased. The Secretary can
only request such a report twice in any 10-year period.
66
This reporting obligation also applies to certain landowners who
have created "pre-existing credits" on their land—see clause 132.
The owner must provide the report within 60 days of the request.
It is an offence to fail to do so with the maximum penalty being
5 penalty units.
Similar to the annual reporting obligation in clause 94, the report
must include—

details of the requirements of the native vegetation
management agreement that must be met during the
period to which the report relates (which the Secretary
must specify in its request); and

whether and, if so, how those requirements were met;
and

photographs that evidence the work carried out in
meeting those requirements.
The clause creates an offence of providing false or misleading
information in a report. The maximum penalty is 60 penalty
units.
Unlike reports under clause 94, the information in the report is
not tied to any payment from the Fund. Rather, the purpose of
the report is to demonstrate whether the agreement is still being
complied with in the longer term. If there is a compliance
problem detected, other provisions of Part 11 could be used to
address the problem (such as entry to land under Division 3 to
verify information and issuing of directions under clause 110).
Division 3—Monitoring and investigation powers
Division 3 sets out powers to enter land for the purposes of enforcing the
scheme under the Bill. It includes—

a power to enter land with consent (clause 98);

a power to enter land with notice (clause 100);

a power to enter land with a warrant (clause 102);

provisions common to each type of entry (clauses 105−109).
67
Clause 98 provides that an authorised officer (as that term is defined in
clause 3) may enter land with the occupier's consent for certain
purposes and in accordance with certain limitations.
In effect, the clause only applies to private land in relation to
which native vegetation credits have been created (being land
subject to a native vegetation management agreement) or land in
relation to which a person has applied to create native vegetation
credits.
Under subclause (1), entry may only be made at a reasonable
time and with the consent of the occupier of the land. Entry may
be for one or more of the following purposes—

to determine whether the owner of the land is
complying with the native vegetation management
agreement;

to verify information contained in an application to
create native vegetation credits;

to verify information contained in a report submitted
under Division 2 of Part 11 in relation to the land;

to determine whether an offence has been committed
under the Act ("investigatory purposes").
Subclause (2) requires the authorised officer prior to seeking the
occupier's consent to provide the occupier with an explanation as
to the purpose of the proposed entry, the powers intended to be
exercised upon entry, the occupier's right to refuse consent or to
give conditional consent and, in the case of entry for
investigatory purposes, a warning that information gathered upon
entry may be used as evidence against the owner of the land.
Subclause (3) clarifies that entry is only authorised in respect of
the purposes to which the occupier has consented.
Subclause (4) provides that entry is subject to any conditions of
the occupier's consent and to the consent continuing. It also
provides that there is no power under this clause to enter any
buildings on the land, as that ought not be necessary to do so for
the purposes of the Bill.
Subclause (5) specifies what an authorised officer may do upon
entry and subclause (6) provides that any information gathered is
not able to be used in evidence in any proceeding against the
owner under the Act.
68
This position changes if entry is consented to for investigatory
purposes. In such cases, subclause (7) provides the authorised
officer with additional powers to ask questions and take samples
and subclause (8) provides that such materials may be used in
evidence.
Any entry under clause 98 is also subject to clauses 99, 105, 107
and 109.
Clause 99 requires an authorised officer to ask an occupier to sign a written
acknowledgement prior to entering land under clause 98.
The acknowledgement must state that the occupier has been
informed as to the matters required to be explained to the
occupier under clause 98(2).
The clause also requires an authorised officer to obtain a written
acknowledgement of consent in relation to any thing taken by the
authorised officer. The authorised officer must also issue a
receipt—see clause 108.
Clause 100 provides that an authorised officer (as that term is defined in
clause 3) may enter land for certain purposes and in accordance
with certain limitations after giving 7 days' notice to the occupier
of the land. This is an alternative basis for entry to clause 98.
As with clause 98, the clause effectively only applies to private
land in relation to which native vegetation credits have been
created (being land subject to a native vegetation management
agreement) or land in relation to which a person has applied to
create native vegetation credits.
Under subclause (1), entry may be for one or more of the
following purposes—

to determine whether the owner of the land is
complying with the native vegetation management
agreement;

to verify information contained in an application to
create native vegetation credits;

to verify information contained in a report submitted
under Division 2 of Part 11 in relation to the land.
Entry under this clause may extend to determining whether an
offence has been committed under the Act ("investigatory
purposes"), but only if the occupier so consents.
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Subclause (2) specifies what an authorised officer may do upon
entry.
Subclause (3) provides for additional powers to ask questions and
take samples if the occupier consents. In such cases, subclause
(5) provides that any information gathered is only able to be used
in evidence if the occupier has also consented to entry being
made for investigatory purposes.
Subclause (4) provides that there is no power under this clause to
enter any buildings on the land.
Subclause (6) provides that entry under this clause must be made
between the hours of 7.30 am and 6.00 pm unless the occupier
consents to entry at other times.
Subclause (7) sets out the particulars of a notice under subclause
(1), which must inform the occupier as to the purpose of the
entry, the occupier's duty to allow entry and the exercise of
powers under subclause (2), the occupier's right to refuse consent
to entry for investigatory purposes and the admissibility in
evidence of information gathered (which turns on whether the
occupier consented to entry for investigatory purposes).
Any entry under clause 100 is also subject to clauses 101, 105,
107 and 109.
Clause 101 requires an authorised officer making entry under clause 100 to
ask an occupier to sign a written acknowledgement if the
occupier has consented to the taking of any thing under that
clause, which would be relevant if the occupier has consented to
entry for investigatory purposes.
Subclause (2) requires a copy of this acknowledgement to be
given to the occupier. The authorised officer must also issue a
receipt—see clause 108.
Subclause (3) requires an authorised officer to leave an
information notice on the land when leaving if the occupier was
absent during the entry.
Clause 102 provides that an authorised officer (as that term is defined in
clause 3) may apply to a magistrate for the issue of a search
warrant in relation to land in certain circumstances.
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Subclause (1) requires the authorised officer to first hold a belief,
on reasonable grounds, that there is on the land evidence of the
commission of an offence against the Bill.
Subclause (2) empowers a magistrate to issue a warrant in
accordance with the Magistrates' Court Act 1989 if satisfied by
the authorised officer's sworn or affirmed evidence that a
particular thing or class of thing is present on the land and those
things are connected with the commission of an offence under the
Bill. The warrant can authorise the authorised officer and any
other persons identified in the warrant (such as assistants) to
enter the land and, if specified in the warrant, re-enter the land.
Entry may be by force if necessary and with any necessary
equipment. Following entry, the authorised officer and others
identified in the warrant may search for particular things,
examine information, take photographs and other media and take
samples of certain materials.
Subclause (3) requires a warrant to set out certain particulars,
including any conditions to which it is subject and an expiry date,
which must not be more than 28 days after its issuing.
Subclause (4) provides that an authorised officer acting under a
warrant under clause 102 may seize a thing from the land even if
it is not described in the warrant if the authorised officer believes
on reasonable grounds that the warrant could have been issued in
respect of that thing and that it will afford evidence about the
commission of an offence under the Bill.
Subclause (5) provides that the rules under the Magistrates'
Court Act 1989 apply to warrants issued under clause 102.
Subclause (6) provides that a warrant does not authorise an
authorised officer to arrest any person.
Any entry under clause 102 is also subject to clauses 103, 104,
105, 107 and 109.
Clause 103 requires an authorised officer or any person assisting the
authorised officer (who would be a person identified in the
warrant under clause 102) to make an announcement prior to
entry. This requirement does not apply if the authorised officer
or assistant is concerned, on reasonable grounds, that it may
frustrate the execution of the warrant.
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Clause 104 provides that, if the occupier or another person who may be the
occupier is present at the time of entry, the authorised officer
must give the person a copy of the warrant.
Clause 105 requires an authorised officer entering land under clause 98, 100
or 102 to produce his or her identification (as that term is defined
in clause 93) for inspection before entering land (if the occupier
is present at entry) and at any time while present, when asked.
Clause 106 creates several offences in relation to authorised officers.
Subclause (1)(a) provides that it is an offence for a person to
obstruct, hinder, intimidate or attempt to obstruct, hinder or
intimidate an authorised officer exercising his or her powers
under the Act.
Subclause (1)(b) provides that it is an offence for a person to
interfere with anything done by an authorised officer in the
exercise of his or her powers under the Act.
Both offences in subclause (1) do not apply if the person has a
reasonable excuse.
Subclause (2) provides that it is an offence to knowingly provide
false or misleading information to an authorised officer.
The maximum penalty for any offence under this clause is
60 penalty units.
Clause 107 essentially provides that an authorised officer must minimise
inconvenience or damage when entering land under Division 3 of
Part 11.
Clause 108 requires an authorised officer who seizes any thing under
Division 3 of Part 11 to issue a receipt to the custodian of the
thing.
Clause 109 specifies what an authorised officer must do if the authorised
officer has taken a sample for analysis, which may occur under
clause 98(7)(d), 100(3)(b) or 102(2)(c)(iv). The officer must
provide certain information to the owner and allow the owner the
opportunity to have his or her own analysis conducted. Once it is
no longer required, the sample must be returned to the owner
unless it is a noxious weed (as that term is defined in clause 3 of
the Bill), in which case it would be destroyed.
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Division 4—Enforcement
Clause 110 provides the Secretary with a power to direct an owner of land to
which a native vegetation management agreement applies to
address contraventions of the agreement. This may be
appropriate where, for example, the Secretary has rejected an
annual report and/or an authorised officer has inspected a site
under Division 3 of Part 11 and found evidence of contraventions
of the agreement.
The power is exercised by the issuing of a written notice under
subclause (1) which sets out the particulars of the directions.
Under subclause (2)(a), the notice must specify a time for
compliance with the directions, which must be at least 28 days.
This period may be extended under subclause (3).
Under subclause (2)(b), the notice must include a warning as to
the key consequences of non-compliance. The key consequences
include—

cancellation of native vegetation credits created for the
land under clause 82; and

the Secretary "stepping in" to carry out the directions
under clause 112; and

the Secretary applying to VCAT for an enforcement
order under clause 113; and

the laying of charges for an offence under Division 5 of
Part 11.
Clause 111 provides for the automatic suspension of certain native vegetation
credits created in relation to land that is the subject of a notice
under clause 110. The suspension effectively prevents allocation
of the credits under clause 63 (see clause 65) or their transfer
under clause 70 (see clause 74).
Under subclause (1), the automatic suspension only applies to
credits that are not allocated and that are still held by the owner
of the land, similar to clause 79(2).
Subclause (2) requires the Secretary to notify the Registrar of
Native Vegetation Credits when a credit is suspended under
subclause (1). This will be required each time directions are
given under clause 110 and enables the Registrar to update the
Native Vegetation Credit Register.
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Under subclause (4), the suspension subsists until such time as
the directions given under clause 110 are complied with.
Subclause (5) requires the Secretary to notify the owner of the
land and the Registrar when this occurs.
Clause 112 sets out one of the enforcement options that may be used when
directions under clause 110 are not complied with.
Under subclause (1), the Secretary may "step in" and carry out
the directions at the owner's expense.
Subclauses (2) and (3) authorise any necessary entry to land for
this purpose, upon 7 days' written notice, for any person and
assistants that the Secretary authorises.
Under subclause (4), as with any entry to land made under
Division 3 of Part 11 (see clause 107), any entry to land under
this clause is subject to a series of obligations to minimise
inconvenience or damage.
Subclause (5) provides that any expenses of the Secretary
necessarily incurred under this clause are recoverable in any
court of competent jurisdiction as a debt due to the Secretary.
Such a debt, if awarded, will be the subject of a charge on the
land—see clause 115.
Clause 113 sets out another of the enforcement options that may be used
when directions under clause 110 are not complied with
(although an order under this clause may also be sought
independently of any direction under clause 110—see below).
Under subclause (1), the Secretary may apply to VCAT for an
enforcement order when an owner of land has failed to comply
with a notice under clause 110 or has failed to meet a
requirement of the relevant native vegetation management
agreement.
Under subclause (2), an enforcement order may—

require the owner of land to carry out, or refrain from
carrying out, specified activities in relation to the
protection or improvement of vegetation on the land;

require the owner of land to provide an offset for any
loss of native vegetation arising from the owner's failure
to comply either with the relevant native vegetation
management agreement or the directions under
74
clause 110 (for example, by acquiring and allocating
native vegetation credits of a volume and type deemed
suitable by VCAT);

cancel any native vegetation credits held by the owner
(whether or not created in relation to the same land).
Subclause (3) requires the Secretary to apply to VCAT under
this clause only if it is not possible to give a direction under
clause 110 that would have the same effect as the VCAT order.
Essentially, this would mean the Secretary could not seek an
order from VCAT that merely required an owner of land to meet
requirements of a native vegetation management agreement or
take particular measures to secure compliance with the agreement
(these being the matters that can be the subject of a notice under
clause 110) without first giving a notice under clause 110.
In circumstances where the Secretary proposes to seek broader
orders from VCAT, such as those relating to the provision of
offsets or the cancellation of credits or an order restraining a
person from carrying out a specified activity on the land,
subclause (3) would permit the Secretary to apply to VCAT
under this clause without any prior directions under clause 110
being issued.
Clause 114 enables the Secretary to apply to a court of competent jurisdiction
for an injunction restraining an owner of land from breaching a
native vegetation management agreement or contravening an
order made by VCAT under clause 113.
Clause 115 provides a mechanism for the Secretary to recover a debt due
under clause 112(5) or 123(7). Subclause (1) provides that the
amount is a first charge on land until recovered by the Secretary.
The land charged is the land owned by the person to whom
directions were issued under clause 110 or who entered into the
enforceable undertaking under clause 123, as the case requires.
Subclause (2) provides that the land is charged on the making of
the order of the court awarding the debt under clause 112(5)
or 123(7).
The Secretary must, under subclause (3), apply for the recording
of notice of the existence of the charge on the title to the land as
soon as practicable after the court awards the debt under
clause 112(5) or 123(7). Under subclause (4), the application
must specify the land and the amount of the charge.
75
The Registrar must record notice of the charge under subclause
(5) and the Secretary must notify the owner of the land under
subclause (6).
Subclause (7) provides that a charge is not effective against a
purchaser for value without notice or any person deriving title
from that person in order to ensure that the charge does not
encumber interests in the land acquired for value without notice
after the charge comes into existence under subclause (1), but
prior to notice of the charge being recorded under subclause (5).
Subclause (8) requires the Secretary to arrange the removal of the
recording of notice of the charge from the title to the land once it
is paid. Subclause (9) requires the Registrar to do so upon receipt
of an application from the Secretary.
Subclause (10) provides that both the recording of notice and the
removal of notice may occur without submission to the Registrar
of any relevant certificate of title.
Clause 116 provides a process for realising the amount secured by a charge
under clause 115. Subclause (1) enables the Secretary to apply to
a court of competent jurisdiction for an order permitting the
Secretary to sell the land. The choice of court would depend on
the value of the land to be sold.
The Secretary may apply to a court under subclause (1) if a
charge has been recorded on the title to the land under clause 115
for at least 12 months, if there is still an amount owing to the
Secretary and if the Secretary has attempted, but failed, to
recover the amount.
Subclause (2) authorises the court to make the order if the court
is satisfied as to the matters required by subclause (1).
Subclause (3) empowers the court to make an order as to the
production of the certificate of title or other relevant document to
facilitate the sale under this clause.
Subclause (4) requires the Secretary to notify the holders of all
registered interests in the land if the court authorises the sale.
The notice must include particulars specified in subclause (5).
Subclause (6) applies section 77 of the Transfer of Land Act
1958 to the sale, which treats the sale as if it were a mortgagee
sale under that Act. This means that the powers and procedures
for a mortgagee sale will govern the sale by the Secretary.
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Division 5—Offences
Division 5 sets out offences relating to compliance with native vegetation
management agreements.
The Bill contains other offences—see clauses 13, 94, 97 and 106.
Clause 117 creates an offence for an owner of land to intentionally or
recklessly remove, lop or destroy native vegetation that is
required to be protected or maintained by a native vegetation
management agreement. The maximum penalty for the offence
is 1200 penalty units.
Clause 118 creates 2 offences in relation to failure to comply with a native
vegetation management agreement resulting in damage or
degradation to native vegetation.
Subclause (1) creates an offence for an owner of private land to
fail to meet a requirement of a native vegetation management
agreement to which the land is subject, provided that the owner
was aware or it was reasonable for the owner to be aware of the
requirement and the failure results in damage or degradation to
native vegetation that is required to be protected or maintained by
the agreement.
Subclause (2) creates an offence for an owner of private land to
use land or permit the land to be used in a manner that
contravenes a native vegetation management agreement,
provided that the owner was aware or it was reasonable for the
owner to be aware of the agreement, and the contravention results
in damage or destruction to native vegetation that is required to
be protected or maintained by the agreement.
The maximum penalty for each offence is 600 penalty units.
It is a defence to either offence for the accused to prove that he or
she took all reasonable steps to comply with the native vegetation
management agreement.
Clause 119 creates 2 offences in relation to failure to comply with a native
vegetation management agreement. These are lower-level
offences to those in clause 118, with a lower penalty, without the
element of the failure having resulted in damage or degradation
to native vegetation that is required to be protected or maintained
by the agreement and without a mental element.
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Subclause (1) creates an offence for an owner of private land to
fail to meet a requirement in a native vegetation management
agreement to which the land is subject.
Subclause (2) creates an offence for an owner of private land to
use or permit the land to be used in a manner that does not
comply with a native vegetation management agreement to which
the land is subject.
The maximum penalty for each offence is 120 penalty units.
It is a defence to either offence for the accused to prove that he or
she took all reasonable steps to comply with the native vegetation
management agreement.
Clause 120 provides that if a court finds a person guilty or convicts a person
of an offence against the Bill, the court may, in addition to the
usual orders under the Sentencing Act 1991, make additional
orders equivalent to the orders VCAT can make under
clause 113. This avoids the need to bring separate civil and
criminal proceedings in relation to one set of circumstances. The
cost of compliance with the additional orders under this clause
may not exceed the value of the maximum penalty that could be
awarded for the relevant offence.
Division 6—Enforceable undertakings
Clause 121 authorises the Secretary to enter into an enforceable undertaking
with an owner of land who has, or is alleged to have, failed to
comply with a native vegetation management agreement to which
the land is subject. The undertaking must be in writing and
specify details of the failure or alleged failure. The undertaking,
once made, may only be varied or withdrawn with the Secretary's
consent.
The clause does not limit the types of matters that the owner of
land may undertake to do in the undertaking.
Clause 122 provides for the effect of an undertaking entered into under
clause 121. Subclause (1) provides for an embargo on
proceedings being brought against the owner in respect of the
offence constituted by the failure or alleged failure (detailed in
the undertaking) while the undertaking is in force.
Subclause (2) provides that the embargo ceases if an undertaking
is withdrawn before it is fulfilled.
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Subclause (3) provides that if an undertaking is fulfilled no
further proceedings may be brought against the owner for the
offence constituted by the failure or alleged failure (detailed in
the undertaking).
Clause 123 provides for the enforcement of undertakings made under
clause 121. Subclause (1) provides that the Secretary may seek
an order from the Magistrates' Court to enforce an undertaking if
the Secretary considers that the person who gave it has breached
it.
Subclause (2) authorises the Magistrates' Court, if satisfied that
the breach occurred, to order the person to comply with the
undertaking or to take any other specified action. The Court can
also make any other order it thinks fit.
Subclause (3) provides that if the person fails to comply with the
Court's order, the Secretary may take any action necessary to
ensure compliance. Subclause (4) enables the Secretary to
authorise any entry to land necessary for this purpose, which
must, under subclause (5), be preceded by at least 7 days' notice
to the owner and occupier.
Subclause (6) provides that, as with any entry under Division 3 or
clause 112, any entry to land under this clause is subject to a
series of obligations to minimise inconvenience or damage.
Subclause (7) provides that any costs of the Secretary in acting
under subclause (3) are recoverable as a debt due from the owner.
The awarding of a debt under subclause (7) creates a charge on
the land—see clause 115.
Subclause (8) clarifies that the mechanism in subclauses (3) to
(7) is additional to, rather than an alternative to, contempt of
court proceedings.
Clause 124 requires the Secretary to maintain a public register of
undertakings made under Division 6 of Part 11, which reflects
that enforceable undertakings are generally a substitute for
criminal proceedings, of which public records would be
available.
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Division 7—Review or reconsideration of decisions
Clause 125 defines reviewable decision for the purposes of Division 7.
A reviewable decision under this Division is able to be the
subject of an internal review under clause 126 or a VCAT review
under clause 127.
Reviewable decisions are—

a decision under clause 12 to reject an application to
create native vegetation credits or to modify the
potential gain in accepting an application;

a decision in relation to a transfer of native vegetation
credits under clause 75;

a decision to cancel native vegetation credits under
clause 81 or 82.
Clause 126 provides for internal review of decisions defined as reviewable
under clause 125. Subclause (1) provides the applicant or holder
of credits (as applicable) with a right to apply for internal review
within 28 days of the decision. An application must be in writing
and, under subclause (2), must set out the reasons for the
application (such as the grounds on which the applicant considers
that the decision was wrong).
Subclause (3) provides the Secretary with a duty to reconsider
the decision that is the subject of the application within 28 days
of an application being made under subclause (1).
The reconsideration, or review, may be carried out by the
Secretary or a person authorised by the Secretary for this purpose
but, under subclause (4), that person must not be the same person
who made the original decision (for example, if that person were
a delegate of the Secretary in making the original decision—
noting that the Secretary may delegate its powers, functions and
duties under the Bill by virtue of section 11 of the Conservation,
Forests and Lands Act 1987—see clause 133(2)).
Subclause (5) requires the Secretary or other authorised person
who conducted the reconsideration to provide a written notice of
the result of the reconsideration. The outcome may be to affirm
the original decision, substitute it with a new decision or revoke
the original decision altogether.
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Clause 126 does not include a requirement to provide reasons as
an applicant has a right to request reasons under section 45 of the
Victorian Civil and Administrative Tribunal Act 1998.
Clause 127 provides that, following an internal review under clause 126, the
applicant under that clause may apply to VCAT for a review of
the original reviewable decision.
The right to apply to VCAT arises on the sooner of the internal
review decision being made or its failure to be made on time.
From that point, the applicant has 28 days to apply to VCAT.
The period for applying may be extended if the applicant has
sought reasons under section 45 of the Victorian Civil and
Administrative Tribunal Act 1998—in such cases, the
application must be made within 28 days after the day on which
the applicant's request is dealt with under that Act.
PART 12—GENERAL
Clause 128 provides the Secretary with a power to set fees that may be
charged when public sector employees act as qualified assessors
under the Bill. See the definition of qualified assessor in
clause 3.
Clause 129 provides the Secretary with a general power to approve forms
under the Bill. Any approved form is required to be available at
the offices and on the website of the Department of Environment
and Primary Industries.
Clause 130 sets out the power of the Governor in Council to make
regulations to support the operation of the Bill. The regulations
may prescribe—

fees that are payable under the Bill;

a manner or method to determine or calculate a range of
metrics used in the Bill, being—

habitat importance score;

potential gain;

relative importance;

strategic biodiversity score;
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
an electronic system (such as a mapping system) or
computer software, or the criteria for such a system or
software, that may produce determinations or
calculations required under the Bill (including, for
example, determinations that relate to habitat
importance score, potential gain, relative importance
and strategic biodiversity score);

any criteria (in addition to a manner or method) that are
relevant to a determination or calculation under the Bill;

the threshold for the purposes of the habitat important
threshold test in clause 5;

various forms, procedures, information and other
administrative requirements under the Bill.
The power to make regulations includes the usual provisions as
to the ability to make different provision for different
circumstances, to require things to be done to a specified standard
or method or to a person's satisfaction, to apply, incorporate or
adopt other matters, to confer a discretionary authority and to
provide exemptions.
PART 13—CONSEQUENTIAL AMENDMENTS AND
TRANSITIONAL PROVISIONS
Division 1—Transitional Provisions
Clause 131 defines security agreement, which is used in clause 132.
The term describes agreements that have been entered into for the
purpose of creating pre-existing credits (which is defined in
clause 3 as a credit identified in an Order made under
clause 132). The agreements are—

land management co-operative agreements under
section 69 of the Conservation, Forests and Lands
Act 1987;

conservation covenants under section 3A of the
Victorian Conservation Trust Act 1972;

agreements under section 173 of the Planning and
Environment Act 1987.
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Clause 132 is a transitional provision. It operates to enable certain dealings
to occur under the Bill with "pre-existing credits".
"Pre-existing credits" are the creation of a policy and agreementbased scheme operated by the Department of Environment and
Primary Industries (and, prior to that, the Department of
Sustainability and Environment) since 2006 (the "existing
scheme"). The existing scheme will cease operating when the
Bill commences operation.
Under the rules of the existing scheme (reflected in various
policy documents and transactional agreements between scheme
participants), credits have been created where ongoing land
management obligations have been created (which is
conceptually similar to the scheme in the Bill) and such credits
have been able to be transferred and allocated, also through the
use of transactional agreements.
This transitional provision in the Bill will enable those key
transactions to continue to occur under the framework established
by the Bill. "Pre-existing credits" will appear on the Native
Vegetation Credit Register and will be capable of allocation and
transfer as with any native vegetation credit created under the
Bill. This will result in one single register, and one single mode
of transacting, for native vegetation credits in Victoria.
Not all of the provisions of the Bill will apply to "pre-existing
credits". Some concepts in the Bill, such as restrictions on
trading credits for the first time, annual reporting and monitoring
and investigation, are dealt with contractually under agreements
made under the existing scheme. As such, the provisions of the
Bill that deal with those concepts will not apply to pre-existing
credits or the land in relation to which they were created.
In terms of the mechanics of the provision, subclause (1) enables
the Minister to make an Order that identifies pre-existing credits.
Subclause (2) requires the Order to specify the details of those
credits.
Subclause (3) requires the Registrar of Native Vegetation Credits
to make an entry for each pre-existing credit, using the
information from the Order, on the Native Vegetation Credit
Register.
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Subclause (4) provides that Parts 1, 6, 7 and 8 (except clauses 72,
74, 75 and 76) and clause 97 apply to pre-existing credits as if
they had been created under the Bill. This has the effect of
enabling them to be searched in the Register and be allocated or
transferred under the Bill.
The application of clause 97 also means that the owner of land
subject to an existing security agreement can be required to
provide a periodic report to the Secretary under that section.
Division 2—Consequential Amendments
Clause 133 amends the Conservation, Forests and Lands Act 1987
("CFL Act").
Subclause (1) inserts a reference to the Bill in sections 11(3A)
and (3B) of the CFL Act. Those sections enable the Minister
responsible for that Act and the Secretary to delegate their
powers, functions and duties under specified Acts to Parks
Victoria, in connection with the management of land by Parks
Victoria. This amendment will effectively allow delegations to
be made to Parks Victoria or to its employees of the Minister's or
Secretary's functions where they are a Crown land manager under
the Bill.
Subclause (2) amends Schedule 1 of the CFL Act to make the
Bill a relevant law within the meaning of that Act. The effect of
this amendment is to enable various features of the CFL Act to be
applied in relation to the Bill. These include the Minister's and
Secretary's power of delegation in sections 11(1) and (2), the
procedures for the appointment of authorised officers under
section 82 and the ability to make regulations under section 99 to
prescribe infringement penalties for certain offences (where
appropriate) under the Bill.
Clause 134 amends the Crown Land (Reserves) Act 1978 to insert new
section 20B.
New section 20B will require the Crown land manager under the
Crown Land (Reserves) Act 1978 to carry out vegetationmanagement works consistently with the requirements of a
vegetation improvement plan that applies to land reserved under
that Act.
84
To the extent that land under the Crown Land (Reserves) Act
1978 is protected public land within the meaning of the Forests
Act 1958, it is noted that the powers and duties in section
62(2)(c) of that Act, relating to proper and sufficient work for the
planned prevention of fire on protected public land, continue
unaffected by the introduction of new section 20B to the Crown
Land (Reserves) Act 1978.
Clause 135 amends the National Parks Act 1975 to insert new section 16C.
New section 16C will require the person responsible for the
management of land under the National Parks Act 1975 to carry
out vegetation-management works consistently with the
requirements of a vegetation improvement plan that applies to
land under that Act.
As with the amendment to the Crown Land (Reserves) Act
1978, it is noted that the powers and duties in section 62(2)(c) of
the Forests Act 1958, relating to proper and sufficient work for
the planned prevention of fire in national parks (as that term is
defined in the Forests Act 1958), continue unaffected by the
introduction of new section 16C to the National Parks Act 1975.
Clause 136 amends the Planning and Environment Act 1987 (the "PE
Act") to effectively—

provide that requirements under a planning scheme or
planning permit under the PE Act to offset the removal,
lopping or destruction of native vegetation can be
satisfied by the allocation of native vegetation credits
under the Bill; and

restrict the situations in which an offset may be
provided on third party land—generally, native
vegetation credits must be used in these cases.
Subclause (1) inserts definitions into section 3(1) of the PE Act.
The definitions of native vegetation credit and offset condition
have the same meaning as they do in the Bill. The definition of
third party land is used in relation to offset conditions. It means
any land that is not subject to the offset condition and which is
not owned by the person who must comply with the offset
condition. A third party offset means the satisfaction of an offset
condition on third party land (in practical terms, this means
where the physical protection or improvement to vegetation that
comprises an offset occurs on third party land).
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Subclause (2) inserts new section 6(4B), which provides that a
planning scheme may regulate the quantity and nature and
attributes of native vegetation credits that is required to satisfy
offset conditions. This is effectively a pre-cursor to new
section 6B(1), inserted by subclause (3)—see below.
Subclause (3) inserts new section 6B.
New section 6B(1) confers a right on a person to use native
vegetation credits to satisfy any offset condition that is in a
planning scheme. The effect of this amendment is to give native
vegetation credits an assured "value" as being capable of
satisfying offset conditions in planning schemes. In light of new
section 6(4B), the planning scheme would be able to regulate the
quantity and type of credits that would be required to satisfy any
offset condition.
New section 6B(2) prohibits the use of any third party offset in
satisfying offset conditions imposed in planning schemes, except
if it involves the allocation of native vegetation credits. In effect,
this aspect of the Bill is "regulating" third party offsets—if an
offset is required to occur on third party land, it will need to be
provided through the creation or acquisition and allocation of
native vegetation credits under the Bill. The clause equally
prevents a planning scheme from requiring third party offsets
(other than with the use of credits) as it does a person from
proposing such an arrangement in satisfaction of an offset
condition.
New section 6B(3) provides an exception to the prohibition in
new section 6B(2) for land in the Melbourne Strategic
Assessment Area (which is defined in clause 3 of the Bill).
Land in that area is subject to a unique development approval
under the Environment Protection and Biodiversity Conservation
Act 1999 of the Commonwealth. Offset conditions imposed by
Victorian planning schemes in this area may require third party
offsets that do not involve native vegetation credits.
Subclause (4) inserts new section 56(2A) which is similar in
effect to new section 6(4B), except that it relates to the ability of
a referral authority to regulate the quantity, nature and attributes
of native vegetation credits required to satisfy an offset condition.
It is effectively a pre-cursor to new section 62(4A), inserted by
subclause (6)—see below.
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Subclause (5) inserts new section 62(2)(h), which is similar in
effect to new sections 6(4B) and 56(2A).
Subclause (6) inserts three new subsections in section 62.
New subsection (4A) confers a right on a person to use native
vegetation credits to satisfy any offset condition that is in a
planning scheme. The effect of this amendment is to give native
vegetation credits an assured "value" as being capable of
satisfying offset conditions in planning permits (whether they be
imposed by the responsible authority or by a referral authority
under section 56).
New subsection (4B) prohibits the use of any third party offset in
satisfying offset conditions imposed in planning permits, except
if it involves the allocation of native vegetation credits.
The clause equally prevents a responsible authority or referral
authority from requiring third party offsets (other than with the
use of credits) as it does a permit-holder from proposing such an
arrangement in satisfaction of an offset condition.
New subsection (4C) provides an exception to the prohibition in
new section 62(4B) for land in the Melbourne Strategic
Assessment Area, similar to new section 6B(3) inserted by
subclause (3).
Clause 137 amends the Traditional Owner Settlement Act 2010
("TOS Act") so that the making of a vegetation improvement
plan in relation to Crown land may be a land use activity under
that Act. Effectively, this means that where the Crown land is
subject to a recognition and settlement agreement under that Act,
a land use activity agreement under Part 4 of the TOS Act will be
able to include the making of a plan under Part 3 of the Bill as an
activity in relation to which the procedural rights under Part 4 of
the TOS Act apply. In such cases, a Crown land manager will
need to comply with any obligations imposed under Part 4 of the
TOS Act as part of preparing a vegetation improvement plan
under Part 3 of the Bill.
Clause 138 amends the Wildlife Act 1975 to insert new section 18C.
New section 18C will require the person responsible for the
management of a State Wildlife Reserve under the Wildlife Act
1975 to carry out vegetation-management works consistently
with the requirements of a vegetation improvement plan that
applies to any State Wildlife Reserve under that Act.
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To the extent that a State Wildlife Reserve is protected public
land within the meaning of the Forests Act 1958, it is noted that
the powers and duties in section 62(2)(c) of that Act, relating to
proper and sufficient work for the planned prevention of fire on
protected public land, continue unaffected by the introduction of
new section 18C to the Wildlife Act 1975.
Clause 139 provides for the repeal of Division 2 of Part 13 of the Bill on
1 July 2016. The repeal does not in any way affect the
amendments made by Division 2—see section 15(1) of the
Interpretation of Legislation Act 1984.
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