In fulfilling this duty, the State Government has incorporated environmental and conservation considerations into all aspects of planning and government program delivery. This is reflected in zones, overlays and provisions and their attached schedules which list what activities are permitted and when a planning permit is required.
See: www.dse.vic.gov.au/planningschemes

Referral Authorities

For most natural resource management decisions local government will refer permits to:
•    Department of Sustainability and Environment
•    Department of Primary Industry
•    Goulburn Broken Catchment Management Authority

The Department of Sustainability and Environment is the commonly used referral authority for planning permit applications that require the removal of native vegetation.

Net Gain

Decision guidelines on permits that entail native vegetation clearing must consider the goal of Net Gain, a reversal, across the entire landscape of long-term decline in the extent and quality of native vegetation.
There is a three-step approach to applying Net Gain.
1.    To avoid adverse impacts, particularly through vegetation clearance.
2.    If impacts cannot be avoided, to minimise impacts through appropriate consideration in planning processes and expert input to project design or management.
3.    Identify appropriate offset options to compensate for native vegetation removal.

Offset-trading

Offset-trading is a new concept that is gaining acceptance. Land with significant natural values may be able to be used as 'offsets' for works that impact on natural values elsewhere. This is how it works:

Developers requiring to undertake an offset because of native vegetation clearing may not have sufficient land available, lack motivation and ability for long term management of the offset.
Landholders may be able to register their site as an offset to supply a developer. These offsets can include improved management of existing bush and revegetation of cleared land. Offsets are allocated a value, which include the types of vegetation communities on the landholder’s property. Rare and threatened species or communities will score a higher offset value.

Where a site is matched against a developer's offset requirement, the developer pays the landholder to provide the required offset. Whilst offset-trading schemes are in their infancy, there is the potential for some landholders to gain substantial economic benefit from offset trading.