Justifications for limits on real property rights

20.70  Arguably, there are a number of laws that interfere with real property rights. Whether such an interference is justified may be assessed by applying a structured proportionality analysis, of the sort widely used in international law, in countries with bills of rights and human rights Acts and by the Australian Parliamentary Joint Committee on Human Rights. The most general justification for laws that interfere with vested property interests is that the interference is necessary and in the public interest. This is also an often used justification in respect of laws which may be seen to interfere with rights in real property.

20.71  This section focuses on justifications which have been used with respect to environmental laws, as these laws generated the most debate among stakeholders in this Inquiry. This Inquiry heard from two groups of stakeholders concerned about property rights: those who emphasised an environmental perspective and those who emphasised a private property perspective. The National Farmers’ Federation (NFF) represented those who emphasised a private property perspective. In the wider public debate, others have also defended private property.[125]

20.72  The Australian Network of Environmental Defenders Offices (the EDOs) and Environmental Justice Australia represented those who emphasise an environmental perspective. Generally, environmental defenders put forward the justifications for interferences with real property rights. Environmental Justice Australia noted ‘[t]he recognition, both internationally and domestically, of the right to property is tempered with the recognition that it will be subject to lawful limitations imposed by the state’.[126] Laws limit land and water use to balance competing private interests, to protect the environment[127] or for the public interest. The EDOs explained that planning and environmental laws ‘evolved in part to address land use conflict arising from incompatible uses of private property (for example, industrial and urban uses), and competing use of natural resources’.[128] Those who emphasise an environmental perspective argued that environmental regulation—which may interfere with real property rights—is both necessary and in the public interest.

International obligations

20.73  There are a range of environmental treaties which require Australia to take actions which may affect property rights.[129] For example, a number of provisions in the EPBC Act were enacted so as to comply with Australia’s international obligations.[130] The Independent Review in 2009 of the EPBC Act (Hawke Report) stated that the need to meet Australia’s international obligations is at ‘the heart’ of the Act and guides its framework. The Hawke Report listed 11 treaties and declarations which were of the ‘most relevance’ to environmental protection under the Act.[131] The EDOs observed that the EPBC Act is the ‘principal legislative vehicle’, at the Commonwealth level, to implement Australia’s international environmental obligations. It also referred to literature that has argued that ‘Australia could and should be doing more to protect species and areas listed under international conventions; that the EPBC Act may fall short of properly implementing Australia’s international environmental obligations’.[132]

Public interest

20.74  The EDOs and Environmental Justice Australia argued that environmental laws are in the public interest. As the EDOs put it, environmental laws exist ‘to protect the environment and conserve natural resources in the public interest, for the benefit of all Australians, including property owners’.[133] The EDOs cited Dr Nicole Graham, that environmental laws ‘indicate the government’s prerogative, indeed responsibility, to balance private rights against the public’s interest in health and environmental protection’.[134] Environmental Justice Australia cited Professor Kevin Gray, who stated that

privileges of ownership have always been intrinsically curtailed by community-oriented obligation. … The community is already entitled—has always been entitled—to the benefit of a public-interest forbearance on the part of the landowner.[135]

20.75  The EDOs called for recognition that rights and freedoms operate in an ecological context, and stated that the need for ecological sustainability meant that the public interest is more prominent today than in Blackstone’s 18th century England.[136] They referred to Preston CJ of the NSW Land and Environment Court, who has argued that the increasing strain on ecological systems will mean that ‘the public benefit demands from these resources will increasingly have to be met first, before the resources are available for private benefits’.[137] The EDOs submitted that there is ‘evidence that the wider community values the environment and feels that regulation across a wide range of sectors is “about right”’.[138]

20.76  Another argument pertaining to the public interest is that a wider requirement to pay compensation to landholders would discourage regulators from implementing environmental protections.[139] The EDOs referred to ‘takings’ legislation in the United States[140] which, it argued, has had a ‘chilling effect’ on government regulatory activity.[141] Some consider that s 51(xxxi) of the Constitution can have a similar effect. However, others argue that placing a price on interferences with property rights leads to better regulatory design on the basis that what is costless is likely to be overindulged.[142]

20.77  The EDOs also submitted that the ALRC should consider ‘the right of all Australians to a healthy environment’ which it said, was ‘emerging’ in human rights law.[143]

Adequacy of existing protection

20.78  Both Environmental Justice Australia and the EDOs submitted that existing protections are adequate to safeguard against any encroachments.[144] Environmental Justice Australia submitted that the protection of s 51(xxxi) ‘operates to protect individuals and ensure that they do not bear a disproportionate burden for the benefit of the community’.[145]

20.79  Both stakeholders also referred to other measures that ensure that private and public interests are balanced fairly. Environmental Justice Australia referred to the requirement that laws not be arbitrary or without foundation but rather for a proper purpose.[146] The EDOs referred to ‘public participation and transparency in decision-making, court review mechanisms and other procedural fairness’[147] that have characterised the implementation of existing environmental laws.

20.80  With respect to the EPBC Act, the EDOs submitted that the embedded objective of ‘promot[ing] ecologically sustainable development’[148] guides decision-makers to effectively balance and integrate economic, environmental and social considerations before making a decision that affects property rights.[149]

Economic arguments

20.81  The EDOs referred to a 2012 Senate Inquiry that ‘called into question’ the suggestion that environmental laws are causing private developers to shoulder an unreasonable burden.[150] They also referred to a number of economic arguments in criticism of US-style ‘takings’ legislation.[151]

20.82  The economic arguments used to justify encroachments on real property rights were considered, for example, by the Productivity Commission in 2004.[152] In addition, Associate Professor Andrew Macintosh and Dr Richard Denniss analysed both equity and economic arguments in their paper assessing whether farmers should have ‘additional statutory rights to compensation when restrictions are placed on their ability to use or clear land and when water allocations are reduced for environmental purposes’.[153] In part, the study responded to the claim that ‘the provision of more secure property rights will stimulate greater investment and improve the allocation of scarce agricultural resources’.[154]

20.83  With respect to the economic arguments, Macintosh and Denniss explained that, because market failure causes many environmental problems, policy makers can choose between ‘polluter-pays’ policies and ‘beneficiary-pays’ policies.[155] The NFF advocated the implementation of a beneficiary-pays model—the person who obtains a benefit should pay the cost of undertaking it. So, if a landowner is prohibited from clearing land for the benefit of the wider community, then the community should pay that landowner compensation. Under the polluter-pays model, a person taking an action should be required to pay the full costs associated with taking that action. So, if a land owner clears the land, that landowner will have to pay the community for any environmental damage caused.

20.84  Macintosh and Denniss explain that, while polluter-pays policies are generally considered to be more economically efficient than beneficiary-pays policies, they typically have higher political costs.[156] They concluded that farmers should not be provided with additional statutory rights to compensation concerning interferences with land use, in part because such an approach would be unlikely to result in a significant increase in agricultural investment or output.[157] While they acknowledged that there was a more convincing economic argument with respect to the claim for compensation concerning interferences with water use, they similarly opposed the creation of additional statutory rights here, explaining that a number of studies had concluded that the economic gains could be limited.[158]

20.85  The Productivity Commission stated that a ‘major aim’ of its recommendations was ‘to make the cost-benefit trade-offs involved in achieving various environmental objectives more transparent, so that optimal policy choices are made’.[159] It stated that the cost-benefit is ‘obscured’ in cases concerning native vegetation and biodiversity regulation of private land ‘because the costs of regulation are largely borne by landholders’:[160]

Regulation of native vegetation clearing on private property effectively asserts public ownership of remnant native vegetation while leaving its ongoing day-to-day management in the hands of the (uncompensated) landholder. From the landholder’s perspective, native vegetation loses much of its private value and becomes a liability. … When regulation reduces the private value to landholders of native vegetation, incentives to care for it are reduced. The prospective private loss also creates an incentive to circumvent the regulations … or to bring forward clearing as insurance against possible strengthening of regulations in future.[161]

20.86  It continued:

Poor incentives for landholders to comply with current regulatory arrangements could be addressed to some extent by compensating landholders for their losses. Payment of compensation would also make the costs of regulation more transparent to the community, facilitating comparison with environmental benefits. However, the Commission does not recommend simply compensating landholders for the impacts of existing compulsory regulatory regimes. This is not only because of the numerous difficulties in assessing appropriate farm-level compensation … but because continued reliance on regulation to achieve a range of broadly-defined environmental goals appears unlikely to be the most effective, least-cost option from a whole-of-community perspective. In this case, compensation would merely shift an unnecessary large cost burden from landholders to taxpayers.[162]

20.87  Relevantly, it recommended:

Landholders individually, or as a group, should bear the cost of actions that directly contribute to sustainable resource use (including, for example, land and water quality) and, hence, the long-term viability of agriculture and other land-based operations.[163]

20.88  Another relevant recommendation was that

Over and above landholder responsibilities, additional conservation apparently demanded by society (for example, to achieve biodiversity, threatened species and greenhouse objectives), should be purchased from landholders where intervention is deemed cost-effective.[164]

20.89  Macintosh and Denniss explained that farm lobby groups welcomed the Productivity Commission’s report, as supporting their claims for a statutory right to compensation. However,

[d]espite the enthusiastic response by farm lobby groups, the Commission’s position on the creation of a statutory right to compensation is unclear. The report does, however, support the notion that public good environmental benefits associated with the retention of native vegetation should be purchased from landholders. It is likely that a statutory right to compensation for the impacts of some native vegetation and biodiversity laws that are designed to achieve ‘public good environmental benefits’ could fit within the framework envisaged by the Productivity Commission.[165]

Distinguishing between rights

20.90  Some stakeholders submitted that an individual’s rights pertaining to a particular property are a different order of rights from human rights. The EDOs argued that the inclusion of environmental law in the Terms of Reference ‘as an area that potentially unreasonably impinges upon personal freedoms evidences a misunderstanding of human rights principles as they relate to property rights’.[166] Environmental Justice Australia submitted that clearing land of native vegetation is not an innate human right:

The principle of a right to own property and not to be arbitrarily deprived of that property should not be confused with the substantive rights that an individual may have to any particular property and does not and should not be seen as a limitation on the ability of governments to enact laws to protect the environment.[167]

20.91  Environmental Justice Australia contrasted the rights to ownership of property and against arbitrary deprivation of that property that are protected in international law, which enjoy ‘a fundamental foundation in the integrity and dignity inherent in every person’, with ‘particular rights to certain property as they exist at a particular point in time’, which do not.[168]

20.92  Environmental Justice Australia also pointed to the universality of human rights. In its view it would be problematic to protect the content of a particular interest in particular property as it would ‘not be universal’, but rather would ‘be concentrated in the hands of the very few’.[169] Both it and the EDOs were critical of any attempt to use a human rights argument to challenge environmental law and regulation. The EDOs saw it as ‘nonsensical’.[170] Environmental Justice Australia submitted that ‘[t]he protection of the content of particular property rights is simply not suitable to a human rights style evaluation framework’, such as using a proportionality test.[171] Conversely, Lorraine Finlay argued:

Firstly, it is not a question of challenging environmental laws and regulations wholly and absolutely. There is obviously a clear community interest in environmental protection, and the question is rather one of the appropriate balance. That is, how do we strike a sensible balance between protecting the environment and protecting property rights? Secondly, property rights are intrinsically centred in a human rights framework. This is apparent at the international level where, for example, property rights are featured in the Universal Declaration of Human Rights. Even more importantly for our purposes, it is apparent at the domestic level within Australia through s 51(xxxi) of the Australian Constitution which … provides for one of the few express rights guarantees within the Australian Constitution.[172]


20.93  In the European context, a proportionality test has been used to determine whether interferences with real property rights caused by environmental laws are justified. As discussed in Chapter 18, protocol 1, art 1 to the European Convention on Human Rights protects the right to ‘the peaceful enjoyment’ of ‘possessions’. Further, it stipulates that ‘no one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law’.

20.94  The European Court of Human Rights has heard a significant number of cases where a citizen has alleged that a state has violated their right to property as protected in art 1 by taking measures (authorised by environment-related legislation) to protect the environment.[173] For example, in Papastavrou v Greece, administrative authorities decided to reafforest land which the applicants claimed belonged to them. It was not possible to obtain compensation under Greek law. The Court found that the applicants’ complaint came within the protection of peaceful enjoyment in art 1. The Court concluded that there had been a violation of art 1 because ‘there was no reasonable balance struck between the public interest and requirements of the protection of the applicants’ rights’.[174]

20.95  With respect to the question of whether there was a ‘reasonable relationship of proportionality between the means employed and the aim pursued’—the cases relating to environmental legislation outline a number of principles. For example:

  • ‘… an interference must achieve a “fair balance” between the demands of the general interest of the community and the requirements of protection of the individual’s fundamental rights’.[175]

  • ‘The requisite balance will not be found if the person concerned has had to bear “an individual and excessive burden”’.[176]

  • States enjoy ‘a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question’.[177]