Financialisaton of nature repair: visionary innovation or short-sighted chimera?

 

See, sons, what things you are

How quickly nature falls into revolt

When gold becomes her object.

2 Henry IV, Act 4, scene 5

 

The Commonwealth Government is pushing ahead with its proposal to establish a market for what it terms ‘nature repair’. The Environment Department website has a page devoted to the Nature Repair Market Exposure Draft of proposed legislation (link here). The Department invited comment and submissions, but this process will close within a week on 24 February. It is not clear if they will publish the submissions they receive. I hope they will so as to transparently air the breadth of issues raised.

 

The Department states:

We are developing a nature repair market to encourage investment in biodiversity and drive environmental improvements across Australia.

Companies are looking at ways to achieve positive outcomes for nature through their investments but a national framework to facilitate that investment is not yet in place.

The market will be underpinned by legislation – the Nature Repair Market Bill (the Bill). This will enable landholders who protect, manage or restore local habitat and to receive biodiversity certificates which can then be sold to other parties. It will ensure the integrity of biodiversity certificates so the market can invest with confidence.

 

The Department’s web page includes links to the draft legislation, and to a series of fact sheets, including a Fact Sheet providing an overview of the proposal (link here) and a Fact Sheet titled Supporting the participation of First Nations people (link here). Key issues addressed (very briefly) include how Indigenous landowners can participate in the market, how they can be involved in market design, and how their rights and interests will be protected.

 

The Guardian recently reported on a number of concerns regarding the proposals from academics and others involved in conservation policy (link here).

 

Like any ambitious policy proposal, there are persuasive arguments in favour and against. This post does not attempt to lay out comprehensively the arguments for and against, and at this point in time, I do not feel qualified to express a definitive view on the merits of the proposal nor the draft legislation. Rather, what I am seeking to do here is provide a provisional introduction to the issue, aimed primarily at persuading readers that this is an issue that requires more attention than it has received to date.

 

It is clear however that this is a policy initiative with significant potential implications for Indigenous interests, and for the management of the Indigenous estate that encompasses around half the continental landmass, and will likely grow to above 60 percent as outstanding native title applications are determined. Whatever the merits of the scheme overall, its impact on Indigenous interests and lands will need close attention both by Indigenous advocates and government policymakers. Of course, the two issues are closely related. If the scheme is flawed or ineffective, and particularly if the regulatory arrangements are not robust enough to ensure that the market operates effectively, then the likelihood is that it will adversely and significantly impact Indigenous interests and landowners given the size of the Indigenous estate.

 

Underpinning the Government’s policy approach is an explicit assumption, laid out in a speech by Environment Minister Plibersek in July 2022 (link here) that the task of preventing landscape degradation (a subset of environmental repair and protection) is beyond the financial capacity of governments. The Minister stated there that ‘The scale of this challenge means that governments can’t do the job alone’.

 

This assumption is problematic on two grounds: the financial challenge is one of priorities, not quantum; and over time the quantum is shaped and determined by policies. I am sure that this is an issue that will be the focus of further research and debate as the proposed legislation progresses. The fundamental rationale for seeking to establish a market that essentially seeks to financialise the natural estate and the task of nature repair is in my view not yet beyond question.

 

There seem to me to be two high level general risks that will need careful management and proactive mitigation. Both of these risks could have a range of sui generis implications for Indigenous landowners.

 

The first risk is the issue raised in the Guardian article mentioned above, namely that the scheme might become a disguised offset scheme which facilitates biodiversity destruction by in effect paying landowners elsewhere to undertake projects aimed at biodiversity maintenance or repair. Without robust regulation, such an outcome might quickly lead to net reductions in biodiversity repair (particularly in sensitive contexts with competing commercial and biodiversity values).  

 

The second general risk is that the transactions costs (both tangible and intangible) associated with the proposed market effectively outweigh the substantive values of the biodiversity certificates at the core of the market. To take just one example, the administrative burdens of compliance for landowners, and of regulatory oversight for governments could be huge. Yet robust regulation is crucial to the schemes success. Excessive transactions costs will lead to market failure of various kinds and thus to counterproductive outcomes.

 

There are also (at least) two risks that particularly relate to the Indigenous policy sector.

 

The first risk is the potential for governments to effectively hide behind the existence of this market to justify limiting both expected future and existing government funding for biodiversity repair. Indigenous landowners are much more reliant on government funding than mainstream landowners as they are less engaged in commercial activities on their lands, so this risk, if it emerges, will impact them more seriously than mainstream interests.

 

Second, I note that in the almost thirty years since the passage of the Native Title Act, no Federal Government has been prepared to establish a comprehensive and adequate funding scheme to support the operations of Prescribed Bodies Corporate (PBCs), the corporate bodies that are mandated by the Native Title Act to hold native title on behalf of native titleholders. These are the organisations, mandated by legislation, that will be key decisionmakers in the proposed biodiversity market. The second risk is that financially constrained Indigenous landowners will not have access to the requisite professional skills and advice to ensure that they obtain a commercial return on the biodiversity certificates they sell.

 

I have published posts raising the issue of inadequate PBC funding previously, including the two most recent at the following links (link here and link here).  The second of these links involved litigation where the Judge was critical of the lack of funding allocated to supporting native title holders. It is a longstanding issue, yet governments are stubbornly intransigent when it comes to addressing it.

 

There are around 250 PBCs in existence (link here). There is limited funding available for PBCs for ‘Basic Support’ which averages around $50k to $80k per PBC. If you do the math, this sums to less than $20m per annum nationally. There is also a capacity building program that totals around $12m per annum. See the National Indigenous Australians Agency (NIAA) webpage (link here) for more details. The bottom line is that Government funding for PBCs that are involved in land management for almost half the nation’s land mass totals $32m per annum. Given the present inadequate funding levels, there must be serious doubts regarding the financial and administrative capability of PBCs to undertake the administrative and policy decision-making workloads associated with the proposed new ‘nature repair’ market arrangements.

 

Finally, it would be remiss not to mention the Commonwealth’s ongoing support and commitment to funding a highly successful network of ranger groups across the Indigenous estate. The NIAA website (link here) indicates that current funding amounts to $746m over seven years to 2028, that is just under $110m per annum nationally to fund between 80 and 100 ranger groups. The NIAA also reports that there are 2100 full time, part time and casual jobs created by the ranger funding program. There is also a very useful map (link here) indicating the location of Indigenous Protected Areas and funded ranger activities nationally. In her speech last year delivering the 2021 State of the Environment Report (link here), Minister Plibersek committed to doubling the number of Indigenous rangers to 3800 by the end of the decade, and to increasing funding to Indigenous Protected Areas. Clearly, the existence of this funded network will facilitate the implementation of biodiversity projects into the future on Indigenous land.

 

What is not clear, at least to me, is whether this expanding national Indigenous Ranger workforce has the depth of experience and expertise to undertake new biodiversity projects funded by the market without being diverted away for existing projects. The concept of a new nature repair market builds upon an established and well entrenched institutional infrastructure of commercial businesses with access to professional advice, finance and technology. It is not clear that this level of institutional depth and intellectual capital exists yet across the 80 plus Indigenous ranger groups. As part of any implementation strategy for the proposed new nature repair scheme, there may well be a case for governments to fund a ten year institutional strengthening project across the existing (and future) ranger network aimed at reducing the risk that capability shortfalls will inhibit take-up or successful implementation of market funded additional biodiversity repair projects on the Indigenous estate.

 

To sum up, the Government’s proposed Nature Repair Market legislation has immense potential implications for Indigenous interests and landowners. These include undoubted financial benefits, but also the potential for serious risks and disadvantage to emerge affecting both the environment and the financial viability of Indigenous organisations. It is just one of the numerous issues currently competing for attention across the Indigenous policy domain. In my view, the policy implications and in particular the potential risks for Indigenous interests deserve greater attention than they appear to have received to date from policymakers.

 

I thank Professor Jon Altman for drawing my attention to the Government’s proposals.

Existential risk to Indigenous languages, transparency and closing the gap

 

If it be now, ’tis not to come; if it be not to come, it will be now;

if it be not now, yet it will come: the readiness is all.

Hamlet Act 5, scene 2.

 

The excellent online journal Inside Story has just published my review of the recently published Gija Dictionary (link here).  I won’t summarise the review here, but will leave it to readers to read for yourselves.

 

The review points to larger policy issues for our nation: do we wish to incrementally slide into a mono-cultural and mono-lingual future, and if not, what will be required to ensure that we don’t. The languages of First Nations are in this respect a special case, as they are in most cases highly vulnerable to falling into disuse.

 

This raises the question: just what is the Commonwealth doing to support Indigenous languages? The answer is not easy to ascertain. The NIAA website contains virtually no reference to the support of languages, not any cross reference to the primary finding agency, the Office of the Arts in the Department of Infrastructure, Transport, Regional Development, Communications and the Arts. The Office of the Arts funds the ILA, the Indigenous Languages and Arts Program with around $25m per annum (link here). A fact sheet dated July 2022 on the Department’s website (link here) outlines the following objectives for the ILA:

The ILA program provides grant funding to support the following objectives: · Capture, revitalise and sustain Indigenous languages · Develop, produce, present, exhibit or perform a diverse range of traditional and contemporary Indigenous art forms · Support new and innovative forms of Indigenous cultural expression through arts · Contribute to the Australian Government’s priorities and outcomes for Aboriginal languages, including those under Target 16 of the National Agreement on Closing the Gap and the International Decade of Indigenous Languages 2022–2032.

 

The Fact Sheet also tells us that the ILA funds ‘around 117 projects that support a wide variety of community-based Indigenous languages and arts activities, including a network of 23 Indigenous Language Centres throughout the country.’ What is not clear is how much of the $27m is directed to language support.

 

In relation to Closing the Gap, the Fact sheet states:

The National Agreement on Closing the Gap now includes a dedicated outcome and a target for Indigenous languages in Australia over the next ten years: · Aboriginal and Torres Strait Islander cultures and languages are strong, supported and flourishing (Outcome 16) · By 2031, there is a sustained increase in number and strength of Aboriginal and Torres Strait Islander languages being spoken (Target 16).

 

Here is not the place for an extended critique of Closing the Gap targets, but I cant resist observing that this target is next to useless, and appears designed as mere rhetorical virtue signalling. Why not measure the comparative rates of fluency in multiple languages amongst First Nations and mainstream citizens? Or the numbers of Indigenous speakers of Indigenous languages? Hopefully the current review of Closing the Gap by the Productivity Commission (link here) will address this issue amongst others.

 

For those interested in what A Walking Shadow believes the Productivity Commission Review of Closing the Gap should focus on in its review, I recommend you consult my detailed submission to the review available on the review website (link here). It is submission number five. It argues for a much more robust approach to Priority Reform Three (see below) and for a focussed process of identifying the actual implementation strategies of the states and territories to implementing the National Agreement on Closing the Gap Agreement.

 

While it would be theoretically feasible to obtain funding allocations for Indigenous language Centres by accessing individual language centre annual reports to the various corporate regulators and/or via the Government’s GrantConnect website, this would be time consuming and frustrating. Whatever the amount (my speculative guess is around $10m per annum), or the price of say eight houses in one of our capital cities, it seems quite inadequate given the implications of cumulative language loss in the past, and it seems, into the future. Deliberate opacity by government was the hallmark of the previous Government, but seems to have been automatically carried over by the current Government.

 

A proactive Government and proactive Ministers concerned to promulgate their social justice credentials would ensure that their agency websites are clear, accessible and that program transparency is maximised. In particular, the NIAA website is in urgent need of a major overhaul aimed at improving accessibility, transparency and in particular, aimed at enhancing linkages to Indigenous funding programs in mainstream agencies (such as ILA) which require sustained attention and monitoring by virtue of the fact that under Priority Reform Three of the National Agreement on Closing the Gap (link here), the Government parties committed to, inter alia:

Increase accountability through transparent funding allocations – Improve transparency of resource allocation to, and distribution by, mainstream institutions in relation to dedicated Aboriginal and Torres Strait Islander service‑delivery. 

 

To sum up, the future of the nation’s unique linguistic heritage is at risk. This issue deserves significant and sustained support from Governments in terms of funding, but also in terms of placing it at the centre of public discourse. The Commonwealth is making a modest contribution (though we can’t determine just how modest), but provides virtually no quality information on what it is doing, how effective its programs are, what are the real risks to individual languages, and what others such as philanthropies and corporates could be doing to strengthen and sustain that living heritage. Closing the Gap is one of the means Governments utilise to assuage community concerns about the quality of Indigenous policy. But this process too has its shortcomings and implementation challenges. And Governments are deeply addicted to the provision of minimal transparency. Three separate, but intricately linked issues.

 

I happen to take the view that it would be a tragedy if bureaucratic obfuscation, or political short-sightedness and game-playing were to contribute to the irrevocable further loss of the first languages spoken in Australia. Policy proactivity is essential. Transparency assists policy effectiveness. Readiness is all.