The design and approval of a proposed project relies heavily on third-party consultants (or ‘experts’) to prepare a range of reports, including assessments related to noise, visual amenity, shadow flicker, aviation, flora and fauna, hydrology, vegetation and various other environmental assessments.
Experts are selected and paid for by the developer. The expert reports are typically included with the developer’s environmental and/or planning permit submission to the responsible authority when seeking approvals for the project. Many of the assessment reports rely on complex calculations or results from predictive computer modelling. These reports also rely on assessing the project against standards that are not always clearly defined.
Some expert reports are inputs to the broader assessment process. For example, background noise assessments are primarily undertaken to set the noise criteria at specified locations, where the noise criteria are, say, ‘40 dB(A) or background noise plus 5 dB(A), whichever is greater’. The background noise must be obtained during the development phase to complete the formula and set the criteria levels.
The accuracy of the assessment reports and recommendations is, therefore, highly dependent on the quality and precision of the assumptions used, the correct application of calculations, the integrity of computer modelling applications, the accuracy of the data used and the skills and judgment of the expert in interpreting the output of the resulting analysis.
Once the project is built, experts are then engaged to carry out any required post-construction assessments. These assessments, and resulting reports, utilise actual data from the operating project. However, they may still rely on assumptions and modelling to collect and analyse the data and then present it in a format to support the conclusions.
It is very common practice that experts engaged to perform the design and predictive assessments during the planning phase are the same experts engaged by the developer to perform the post-construction assessments. Developers may also often use the same experts on multiple projects, establishing long-term relationships between the parties.
Process and conflicts
The selection and use of the same expert in both the design/proposal phases and then post-construction phases of a project may give rise to perceived or real conflicts of interest between the developer and the expert, as well as the client (i.e., the developer) expectations effectively placed upon the expert to confirm the project’s compliance.
As a hypothetical example, an acoustician engaged to assess a proposed wind farm’s design and layout for compliance with the noise standard – is then subsequently engaged to assess the constructed, operating wind farm to confirm operational compliance with the noise standard. The expert acoustician may then be placed in a difficult situation if the acoustician discovers some aspects of the operating wind farm are potentially non-compliant, particularly if those areas of non-compliance may be a result of errors or assumptions made in the acoustician’s predictive assessment. Enormous pressure could potentially be placed on the expert acoustician to measure and/or interpret the post-construction operating noise data in such a way that would demonstrate compliance, rather than non-compliance, of the operating asset.
Expert reports submitted to the developer and, in turn, submitted by the developer to the responsible authority and other relevant agencies would be assisted greatly if such reports were subject to an independent audit carried out by an accredited independent auditor.
There is certainly scope for a clearer separation between the experts used for the predictive assessments, during the design/proposal stage, versus the experts used for the post-construction assessments of a project, along with the inclusion of independent audits of the expert’s reports. A more rigorous process would yield a range of material benefits, including minimising costly expert errors made during the assessment phase, minimise or eliminate perceived or real conflicts of interest and provide all stakeholders greater confidence in the integrity and reliability of the expert’s advice and reports.
Best practices that have been observed are as follows:
- A suitably qualified expert be appointed by a developer to carry out the relevant predictive assessment as required for the planning application. The appointed expert must be free of any real or perceived conflicts of interest and/or declare any potential conflict of interest and advise how it will be managed.
- Before submitting the project’s design or planning application, an independent, accredited auditor is appointed to scrutinise and review each expert’s assessment/design report. The auditor’s reports and findings/recommendations are provided to the developer, the developer’s expert, the responsible planning authority and other relevant agencies for the subject matter (e.g., Civil Aviation Safety Authority, Country Fire Authority, Environment Protection Authority, Australian Government Department of the Environment, local Council etc.).
- Decisions to approve the planning application then include a review of the expert’s predictive assessment reports together with the accompanying audit reports. An unfavourable audit report may require the expert to revise their report – or for the proponent to engage a new expert – before permit approval can be granted.
- Once the project is constructed, a different expert (that is, different and unrelated to the ‘predictive assessment’ expert) is to be appointed to carry out required post-construction compliance assessments, as specified by the planning permit or equivalent instruments.
- The post-construction compliance report is then reviewed by a different, independent, accredited auditor (that is, no association with the auditor of the ‘predictive assessment’ report) to confirm the accuracy and integrity of the post-construction report. The post-construction auditor’s findings/recommendations are issued to the developer, responsible authority and other relevant agencies.
- Project compliance is confirmed once the responsible authority is satisfied with the findings of the experts, accompanied by unqualified, independent audit reports.
These additional steps and appropriate separation of experts and auditors will go a long way to facilitate confidence for all stakeholders in the significant decisions that are made based on expert reports. The process will also provide better protection for industry from very costly errors and risks of subsequently being found to be non-compliant.
This type of approach for noise assessments was piloted, on a voluntary basis, at a proposed Victorian wind farm. In applying a more conservative approach than the initial assessment, the process found that a material number of turbines at that wind farm were at risk of breaching compliance if deployed as planned. Early identification of these issues allowed the proponent to adjust the operational design and parameters accordingly to ensure compliance – before construction commenced.
The Victorian Government has now formally adopted the accredited noise assessment auditor framework for all new and modified wind farm planning permits. Other states have implemented or are considering implementing variations on the above. In some cases, industry proponents have also adopted some or all of these best practices, even if not required, to ensure the integrity and accuracy of the expert reports they are relying on. The practice of utilising a different expert to undertake the post-construction compliance testing program is also being increasingly adopted by industry and recommended by auditors.
In addition to predictive noise assessments, other expert disciplines that have led to material issues in recent times included aviation safety assessments, flora and fauna assessments, measurement of turbines from dwellings and vegetation clearing assessments for transportation routes. Errors and/or omissions in those assessments lead to significant project delays, project cost overruns, litigation or non-approval/cancellation of the project as a result.
Finally, it is expected that these reforms will increase the market opportunities for additional experts and auditors as well as help facilitate growth of skills and firms in the relevant expert disciplines.
6.2.1 Given the heavy reliance on advice and assessments provided by experts in a project’s design, planning, construction and compliance decision-making, qualified experts used for assessment engagements should be ideally selected from an accredited panel or list. The panel or list could be maintained by the relevant responsible authority (or environmental regulator) or a recognised referral agency, such as CASA. Alternately, the panel or list could be maintained by a relevant industry body or association.
6.2.2 To ensure independence and remove any real or perceived conflicts of interest, the expert organisation (or ‘expert’) selected to perform post-construction compliance assessments of a project should be a different expert to the one engaged for the design and predictive assessment planning phases of that project.
6.2.3 Expert reports, assessments and techniques used for planning submissions, such as the predictive noise assessment, should be reviewed and assessed by an independent auditor appointed or accredited by the responsible authority and/or relevant regulator. Further, expert reports prepared with respect to post-construction compliance should also be reviewed and assessed by a different, independent auditor, also appointed or accredited by the responsible authority and/or relevant regulator.
6.2.4 The appointed independent auditors (refer to Recommendation 6.2.3) should be suitably qualified, experienced and accredited, have the ability to assess the integrity and accuracy of the expert’s report and be able to identify and confirm compliance or non-compliance with the relevant permit conditions and/or prescribed standards.
6.2.5 Planning permit approval processes should carefully take into account the advice of independent auditors and/or referral agencies, such as CASA, before deciding on whether to approve a project. Where appropriate, designated authorities (e.g., the relevant road authority) may be deemed to be a statutory referral agency, whereby their advice and recommendations must be adhered to by the responsible planning authority.