While Labor’s environmental promises coming into Government are on the public record, the appointment of Senator Penny Wong and Peter Garrett to respective environmental portfolios has some further implications and opportunities.

Based on her background as an attorney and her former Shadow Ministerial responsibilities for corporate governance and responsibility, it is fair to say that Senator Wong has expertise in corporate governance and a strong understanding of how companies work. Through her background, she will know that disclosure and measurement drive outcomes. For example, Senator Wong has publicly supported the Parliamentary Joint Committee on Corporations and Financial Services’ recent report titled, Corporate Responsibility: Managing risk and creating value, which put forward measures for business on environmental and social risks.

As the Committee was influenced by the former Government’s numbers, Senator Wong also advocated a series of measures beyond those officially recommended:

· Establish a Corporate Responsibility Unit in a business-oriented government agency to develop and deliver corporate responsibility policy;
· An immediate audit of government regulations that help or hinder sustainable business activities;
· A National Sustainability Council responsible for policy ideas and national targets on sustainability issues;
· Ensure that government leads by example by implementing mandatory obligations for government agencies on sustainability reporting and performance; and
· A flexible, mandatory minimum of reporting on non-financial risks and strategies to mitigate them by listed and large proprietary companies.

Senator Wong’s legal and Parliamentary experience may well have some logical consequences in policy development – beyond what’s already been pledged in the election campaign. In my view, this includes some of the following possibilities:

· Increased emphasis on public reporting of companies’ environmental performance, potentially including via annual accounts/statements
· Potential changes to National Pollutant Inventory rules
· Potential rationalisation / consolidation of energy, greenhouse and water reporting regimes across Australia
· Possibly a new Intergovernmental Agreement on Environment and National Environment Protection Measure framework – and a re-assessment of how environmental matters are managed across Commonwealth / State / local governments
· Possible extensions to provisions for Board director / senior executive liability for environmental harm by companies
· Capacity building measures for business to address climate change risks

The bottom line is that Senator Wong is uniquely placed to drive environmental reform from where it matters most - the executive suite and Boardroom – via not only environmental policy/regulation but corporations law. This will mean she will need to get the cooperation of the Minister for Finance, Lindsay Tanner MP, who is on the record as a strong and articulate advocate of climate change reform.

It would initially appear that Peter Garrett’s influence will be of a different variety. The substantive components of the broader environmental portfolio are climate change and water, which Wong will take hold of. This leaves elements such as Commonwealth national parks, forestry policy, biodiversity policy, whaling, Antarctica, hazardous waste, cultural heritage and others to Garrett. While it has no direct Constitutional control of many environmental matters, the Commonwealth under Garrett may play a stronger national facilitative role on various issues, such as urban sustainability and waste management/resource recovery. For example, there are several NEPMs currently under development – including for product stewardship – that Garrett may seek to positively influence (read: speed up) by utilising Labor’s historic ascendancy in every State and Territory in this regard.

At the same time, new Departmental arrangements are of note. It would appear that Minister for Climate Change and Water Penny Wong has the new Department of Climate Change (the old Greenhouse Office) and the water policy part of the new Department of Water, Heritage and the Arts. However, her control of the new Department of Climate Change (DCC) may be shared, as it remains part of the Prime Minister and Cabinet portfolio, which potentially reflects the centrality of the issues at hand, and the nomination of the Treasurer to answer relevant questions in the Lower House.

Minister for the Environment, Heritage and the Arts Peter Garrett has the remainder of the new Department of the Environment, Water, Heritage and the Arts (DEWHA). This new agency is a result of a merger of the old DEWR and the Arts section from the old DCITA. It should be noted that consumer / householder environmental change programs will be in the new DEWHA and under Garrett.

Interestingly, the energy and water efficiency program pledged by Labor (eg, $240 million Clean Business Australia program) looks to be housed in the new Department of Resources, Energy and Tourism (DRET) under Minister for Resources, Energy and Tourism Martin Ferguson.