The Tasmanian Government is hoping it can provide legal conservation protection to a different block of land rather than the proposed prison land north of Westbury in an attempt to gain Commonwealth environmental approval.
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The Environment Department has prepared a shortlist of sites that could be used as an "offset", allowing it to avoid protecting the prison land on Birralee Road.
The Tasmanian Government purchased the land using $569,400 in Commonwealth funds - one of 10 blocks purchased in Tasmania in the late 1990s under the National Reserve System - with a requirement that the land be "legally protected" and not used for purposes other than for conservation.
The proposed prison land was the only one of the properties yet to have legal protection.
But in communications released under Right to Information this month, it became clear that government departments were on the lookout for new land that could be protected instead of the prison land.
In June, Northern Regional Prison planning and approvals manager Andrew Harvey requested a discussion with Andrew Crane from DPIPWE's natural and cultural heritage division about "the search for a suitable offset".
"I'd also be interested in looking at the short list (including maps) of possible sites for an offset that you've identified," he wrote.
Mr Harvey also sought clarity on whether the contract or agreement with the Commonwealth regarding the prison land was "overarching" under the Regional Forest Agreement, or individual for each block.
Earlier this month, the prison's project director confirmed to opponents by email that the proposal would be referred to the federal environment minister under the Environment Protection and Biodiversity Conservation Act due to its impact on the environment.
Offsets - in which a proponent commits to protecting a different area of land - is a common way of overcoming the federal environmental approval hurdle.
Westbury Region Against the Prison president Linda Poulton said it was evidence that the government knows that the prison will have "significant impacts" on environmental values, contrary to its earlier claims.
A spokesperson for DPIPWE said discussions between the state and federal governments were ongoing.
"The department has regular discussions with the Australian Government regarding properties on the Tasmanian and National Reserve Estate including the Birralee Road property and other properties," the spokesperson said.
"Both parties are working through a process to resolve outstanding matters in relation to these."
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