Sea Dumping Permit Application Fees
COST RECOVERY IMPACT STATEMENT
July 2013 – June 2015
2013-2015 CRIS for Sea Dumping Permit Application Fees
Table of Contents
1.
OVERVIEW
1.1
1.2
1.3
2.
POLICY REVIEW – Analysis of Activities
2.1
2.2
2.3
2.4
2.5
2.6
3.
Projected Expenses and Revenue
MONITORING MECHANISMS
6.1
6.2
6.3
7.
Cost Recovery Activities
Costs Components
Changes in Cost Base
Volume and Demand Assumptions
Summary of Charging Arrangements
PROJECTED EXPENSES AND REVENUE FOR THE CRIS
5.1
6.
Design of the Cost Recovery Arrangement
Basis of Charging – Fee or Levy
COST RECOVERY MODEL
4.1
4.2
4.3
4.4
4.5
5.
Policy Authority
Partial cost recovery
Legal Requirements for the Imposition of Charges
Description of Cost Recovery Activities
Users and Stakeholders
Conclusion
DESIGN
3.1
3.1
4.
Purpose
Background
Australian Government Cost Recovery Policy
Monitoring Mechanisms
Stakeholder Consultation
Periodic Review
CERTIFICATION
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2013-2015 CRIS for Sea Dumping Permit Application Fees
1.
OVERVIEW
1.1
Purpose
The purpose of this Cost Recovery Impact Statement (CRIS) is to document cost
recovery arrangements for the Sea Dumping Permit application fees and demonstrate
their compliance with the Australian Government Cost Recovery Guidelines. The
Department of the Environment (the Department) plans to review these cost recovery
arrangements prior to the expiry of the current CRIS in 2015.
1.2
Background
Sea Dumping Permit application fees are authorised under the Environment Protection
(Sea Dumping) Act 1981 (the Sea Dumping Act) and the Environment Protection (Sea
Dumping) Regulations 1983 (the Sea Dumping Regulations). The fees that will apply for
the duration of this CRIS remain unchanged since they were approved in 2009.
The Department is responsible for the implementation and administration of the Sea
Dumping Act through a permitting regime. Permits are required for all sea dumping
activities, including dumping dredge spoil; artificial reefs; vessel disposal; offshore
platforms; and burials at sea. The prescribed fees vary according to the type of material
being dumped and in the case of dredge spoil are categorised based on the quantity of
material included in the permit sought.
1.3
Australian Government Cost Recovery Policy
In December 2002, the Australian Government adopted a formal cost recovery policy to
improve the consistency, transparency and accountability of its cost recovery
arrangements and promote the efficient allocation of resources. The underlying
principle of the policy is that agencies set charges to recover all the costs of a product
or service where it is efficient and effective to do so, where the beneficiaries are a
narrow and identifiable group and where charging is consistent with Australian
Government policy objectives. The Cost Recovery Policy is administered by the
Department of Finance and is detailed in the Australian Government Cost Recovery
Guidelines (the Cost Recovery Guidelines).
The policy applies to all Financial Management and Accountability Act 1997 (FMA Act)
agencies and to relevant Commonwealth Authorities and Companies Act 1997 (CAC Act)
bodies that have been notified. In line with the policy, individual portfolio ministers are
ultimately responsible for ensuring agencies’ implementation and compliance with the
Cost Recovery Guidelines.
The Australian Government Cost Recovery Guidelines and the accompanying Finance
Circular can be found at: http://www.finance.gov.au/financial-framework/financialmanagement-policy-guidance/cost-recovery.html
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2013-2015 CRIS for Sea Dumping Permit Application Fees
2.
POLICY REVIEW - ANALYSIS OF ACTIVITIES
2.1
Policy Authority to Cost Recover
As part of the 2006-07 Budget, the Government initially agreed that fees under the Sea
Dumping Act will be imposed on a full cost recovery basis.1
However, following the review of cost recovery arrangements for the Environment
portfolio completed in 2011, the Department sought (and obtained) Government’s
approval for partial cost recovery arrangements for the Sea Dumping Permits
application fees. Until the next review of the cost recovery arrangements is undertaken
(section 1.1 refers), partial cost recovery arrangements are considered appropriate to
avoid providing a perverse incentive to by-pass the regulations and encourage illegal
sea dumping if full costs were recovered.
2.2
Legal Requirements for the Imposition of Charges
The authority to charge fees is under the Environment Protection (Sea Dumping) Act
1981 and the Environment Protection (Sea Dumping) Regulations 1983.
The Sea Dumping Permit applications for dredging activities are supported by the
National Assessment Guidelines for Dredging that are available at
http://environment.gov.au/coasts/pollution/dumping/publications/guidelines.html
They were last reviewed in 2008-09.
The
guidelines
for
other
permit
applications
are
http://www.environment.gov.au/coasts/pollution/dumping/index.html
2.3
available
at
Description of Activities
The Sea Dumping Act requires permits to be issued for various activities. It enables
Australia to comply with its obligations under the London Protocol to prevent marine
pollution caused by dumping or incineration at sea of wastes or other matter (article
3.2 of the London Protocol obliges parties to adopt a polluter pays principle).
Activities undertaken by the Department comprise registration, assessment and
administration of the Sea Dumping Permit applications. Table 1 in section 4.1 splits Sea
Dumping Permit applications into two categories:
2.5
-
dredging permit applications and variations, and
-
burials at sea, artificial reefs, and disposal of platforms and vessels.
Users and Stakeholders
The Department has ongoing consultative arrangements with Ports Australia, the peak
industry body, the relevant State Government agencies and individual applicants where
1
Please refer to the 2006-07 Budget Paper 2 Part 1 page 12 - Budget Paper No. 2: Budget Measures
2006-07 — Contents and Download
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2013-2015 CRIS for Sea Dumping Permit Application Fees
the stakeholder constituency is either known or identifiable and is primarily concerned
with dredging and disposal activities.
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2013-2015 CRIS for Sea Dumping Permit Application Fees
3.
DESIGN
3.1
Design of Cost Recovery Arrangement
The cost recovery arrangement was designed to reflect the cost of administering the
permit process. Dredge Permit application fees relate to the type of material being
dumped and, in the case of dredge material, are categorised based on the quantity of
the material. This requires detailed analysis of the material to be dredged to determine
contaminant levels (if any). Larger volumes may have greater environmental impacts
and require more assessment, while applications for small volumes have declined to
zero.
3.2
Basis of Charging – Fee or Levy
The cost recovery arrangement is a graduated fee structure. Port operators account for
the majority of Sea Dumping Permit applications. Fees are considered to be the most
appropriate charging mechanisms (i.e. as opposed to an industry levy) due to the ability
to clearly identify the entity that requests the service and allocate costs to that service.
The fee was set through a consultative process with stakeholders to create a balance
between cost recovery and a perverse incentive to by-pass the regulations and
encourage illegal sea dumping if full costs were recovered. It is proposed to develop a
revised consultative process using the Office of Best Practice Regulation guidelines for
regulatory impact assessments.
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2013-2015 CRIS for Sea Dumping Permit Application Fees
4.
COST RECOVERY MODEL
4.1
Cost Recovery Activities
Table 1: List of Cost Recovery Activities and associated Charges
Ref
Activity Name
Description
Charge Title
1.1
Sea Dumping Permit –
Dredged or excavated
material greater than
100,000 m3
Sea Dumping Permit –
Dredged or excavated
material less than 100,000
m3
Variation of Permit
Expenses associated with the processing of an
application.
Application Fee
Expenses associated with the processing of an
application.
Application Fee
Expenses associated with the processing of a
variation to an existing permit.
Expenses associated with the processing of an
application.
Expenses associated with the processing of an
application.
Expenses associated with the processing of an
application.
Expenses associated with the processing of an
application.
Application Fee
1.2
1.3
2.1
2.2
2.3
2.4
4.2
Sea Dumping Permit –
Artificial Reef
Sea Dumping Permit – Burial
at Sea
Sea Dumping Permit Platforms
Sea Dumping Permit –
Vessels
Application Fee
Application Fee
Application Fee
Application Fee
Cost Components
Table 2:
Activity Expenses
Activity 1.1 : Processing Costs of a Sea Dumping Permit Application – Dredged or excavated material
greater than 100,000 m3
Cost Components
Direct
- Salaries/On costs
Variable Costs
- Professional Services
Total Activity Cost per Year
Jul13 – Jun14
($’000)
Jul14 – Jun15
($’000)
Total
($’000)
52.54
52.54
105.08
89.14
141.68
89.14
141.68
178.28
283.36
Activity 1.2 : Processing Costs of a Sea Dumping Permit Application – Dredged or excavated material
less than 100,000 m3
Cost Components
Direct
- Salaries/On costs
Variable Costs
- Professional Services
Total Activity Cost per Year
Jul13 –
Jun14
($’000)
Jul14 –
Jun15
($’000)
Total
($’000)
0
0
0
0
0
0
0
0
0
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2013-2015 CRIS for Sea Dumping Permit Application Fees
Table 2: Activity Expenses (continued)
Activity 1.3 : Processing Costs of a Sea Dumping Permit Application Variation
Cost Components
Direct
- Salaries/On costs
Total Activity Cost per Year
Jul13 –
Jun14
($’000)
Jul14 –
Jun15
($’000)
Total
($’000)
7.28
7.28
7.28
7.28
14.56
14.56
Activity 2.1 : Processing Costs of a Sea Dumping Permit Application – Artificial Reefs
Cost Components
Direct
- Salaries/On costs
Variable Costs
- Professional Services
Total Activity Cost per Year
Jul13 –
Jun14
($’000)
Jul14 –
Jun15
($’000)
Total
($’000)
0
3.63
3.63
0
0
13.58
17.21
13.58
17.21
Activity 2.2 : Processing Costs of a Sea Dumping Permit Application – Burial at Sea
Cost Components
Direct
- Salaries/On costs
Total Activity Cost per Year
Jul13 –
Jun14
($’000)
Jul14 –
Jun15
($’000)
Total
($’000)
5.3
5.3
5.3
5.3
10.6
10.6
Activity 2.3 : Processing Costs of a Sea Dumping Permit Application – Platforms
Cost Components
Direct
- Salaries/On costs
Total Activity Cost per Year
Jul13 –
Jun14
($’000)
Jul14 –
Jun15
($’000)
Total
($’000)
0
0
0
0
0
0
Activity 2.4 : Processing Costs of a Sea Dumping Permit Application – Vessels
Cost Components
Direct
- Salaries/On costs
Total Activity Cost per Year
Jul13 –
Jun14
($’000)
Jul14 –
Jun15
($’000)
Total
($’000)
0
0
0
0
0
0
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2013-2015 CRIS for Sea Dumping Permit Application Fees
4.3
Changes in Cost Base
Changes in the cost base are anticipated in the out-years for all activities, but are
generally limited to Consumer Price Index adjustments for professional services, which
are external resources, and increase in individual salary costs arising from new
enterprise agreements. These changes are expected to be relatively minor and were
averaged over 2013-14 and 2014-15.
4.4
Volume and/or Demand Assumptions
Demand estimates in Table 3 are generated using historical data and reflect a
downward trend of demand for some Sea Dumping permits. However, demand for
other permits is expected to remain relatively stable over the duration of the CRIS. Due
to the implementation of assessment process efficiencies, the Department expects to
reduce its direct employee expenses compared to the previous CRIS period.
Table 3: Demand Assumptions
Sea Dumping Permit Applications
Ref
Activity Name
July 2013 –
June 2014
July 2014 –
June 2015
Total
1.1
Sea Dumping Permit –
Dredged or excavated
material greater than
100,000 m3
Sea Dumping Permit –
Dredged or excavated
material less than 100,000
m3
Sea Dumping Permit
Variation
Sea Dumping Permit –
Artificial Reef
Sea Dumping Permit – Burial
at Sea
Sea Dumping Permit –
Platforms
Sea Dumping Permit –
Vessels
6
6
12
0
0
0
8
8
16
0
1
1
4
4
8
0
0
0
0
0
0
1.2
1.3
2.1
2.2
2.3
2.4
4.5
Summary of Charging Structure
Table 4:
Summary of Charging Structure
Activity Name
1.1
Sea Dumping
Permit – Dredged
or excavated
Method of
Recovery
Fee for
Application
Total Cost
of Activity
($’000)
No. of
Permits
Granted
Cost Recovery
Charge
283.36
12
$23,500
Total Cost
Recovered
for Activity
($’000)
282.00
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2013-2015 CRIS for Sea Dumping Permit Application Fees
material greater
than 100,000 m3
Sea Dumping
Permit – Dredged
or excavated
material less than
100,000 m3
Variation of Permit
1.2
1.3
2.1
Sea Dumping
Permit – Artificial
Reef
Sea Dumping
Permit – Burial at
Sea
Sea Dumping –
Platforms
Sea Dumping –
Vessels
2.2
2.3
2.4
5.
Fee for
Application
0
0
$10,000
0
Fee for
Application
Fee for
Application
14.56
16
$860
13.76
17.21
1
$10,000
10.00
Fee for
Application
10.60
8
$1,650
13.20
Fee for
Application
0
0
$12,700
0
Fee for
Application
0
0
$12,700
0
Total fee for
service
318.96
TOTAL
318.96
PROJECTED EXPENSES AND REVENUE FOR DURATION OF CRIS
Expenses for activities are derived from historical data; however, the demand for some
activities has declined significantly, in some cases to zero.
5.1
Projected Expenses and Revenue
Table 5: Projected Expenses and Revenue
Ref
1.1
1.2
1.3
2.1
2.2
Activity Name
Jul 13 –
Jun 14
Jul 14 – Jun
15
Total
($’000)
($’000)
($’000)
Sea Dumping Permit – Dredged or excavated material greater than 100,000
m3
Expenses
141.68
141.68
283.36
Revenue
141.00
141.00
282.00
Balance +/- 0.68
- 0.68
- 1.36
Sea Dumping Permit – Dredged or excavated material less than 100,000 m3
Expenses
0
0
0
Revenue
0
0
0
Balance +/0
0
0
Sea Dumping Permit Variation
Expenses
7.28
7.28
14.56
Revenue
6.88
6.88
13.76
Balance +/-0.40
-0.40
-0.80
Sea Dumping Permit – Artificial Reef
Expenses
0
17.21
17.21
Revenue
0
10.00
10.00
Balance +/0
-7.21
-7.21
Sea Dumping Permit – Burial at Sea
Expenses
5.30
5.30
10.60
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2013-2015 CRIS for Sea Dumping Permit Application Fees
Revenue
6.60
+/-Balance
+1.30
2.3
Sea Dumping Permit – Platforms
Expenses
0
Revenue
0
Balance +/0
2.4
Sea Dumping Permit – Vessels
Expenses
0
Revenue
0
Balance +/0
154.26
Overall Expenses
154.48
Overall Revenue
+0.22
Operating Result
6.60
+1.30
13.20
+2.60
0
0
0
0
0
0
0
0
0
171.47
164.48
-6.99
0
0
0
325.73
318.96
-6.77
Any shortfall in cost recovery revenue will be met from within the Department’s budget.
Table 6: Projected Expenses and Revenue Summary
Item
Amount (2013-14)
($)
Amount (201415)
Total
($)
($)
Revenue
Application Fees
(Activity 1.1)
141,000
Application Fees
(Activity 1.2)
Application Fees
(Activity 1.3)
6,880
Application Fees
(Activity 2.1)
Application Fees
(Activity 2.2)
141,000
6,600
282,000
-
13,760
6,880
10,000
10,000
6,600
13,200
Application Fees
(Activity 2.3)
-
-
-
Application Fees
(Activity 2.4)
-
-
-
Total Revenue
(expected)
154,480
164,480
318,960
Expenses
Direct employee
expenses
Corporate on-costs
Professional Services
(Technical Panel)
Total Expenses
48,059
17,061
89,140
154,260
51,629
17,121
102,720
171,470
99,688
34,182
191,860
325,730
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2013-2015 CRIS for Sea Dumping Permit Application Fees
6.
ONGOING MONITORING
6.1
Monitoring Mechanisms
The Department plans to develop a database for tracking Sea Dumping permits, which
will also allow reporting by permit and fee types. The database is anticipated to
expedite the Department’s capacity to meet Parliamentary and international reporting
requirements.
The Department also currently manages a ‘panel’ arrangement for consultancy
services, which are used to undertake the technical assessment of the dumping
activities. Under the panel arrangement, which has been selected using a tender
process, the hourly rate of the consultancy services is known in advance, which allows
the Department to undertake procurement on a ‘best value for money’ basis.
Cost recovery revenue from this arrangement will be reported in the Department’s
Annual Report in accordance with the Finance Minister’s Orders.
6.2
Stakeholder Consultation
The Department has ongoing consultative arrangements with Ports Australia, but there
has not been substantive stakeholder consultation regarding cost recovery issues since
the assessment guidelines and fees for applications were updated in 2009.
6.3
Periodic Review
These cost recovery arrangements will be reviewed by the end of 2014-15, with a new
CRIS prepared for commencement on 1 July 2015.
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2013-2015 CRIS for Sea Dumping Permit Application Fees
7.
CERTIFICATION
I certify that this CRIS complies with the Australian Government Cost Recovery Guidelines.
Secretary
Department of the Environment
Date:
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