Environment Minister Bob Pearce refused an appeal by Melville City Council seeking a formal environmental assessment of the proposed Lakes Hospital site.

The State Government planned to construct a juvenile remand centre at the site, with the council appealing an earlier Environmental Protection Authority decision that the proposal did not require formal assessment before development.

City manager Garry Hunt said work on the proposed juvenile remand centre should not begin until amendments were made to the Metropolitan Region Scheme and a planning application had been submitted and approved.

The council argued the site had conservation significance because of its wetlands, wildlife, drainage and construction requirements. It also raised concerns about the impact of development on bandicoots, which were common south of the Swan River coastal plain, and the turtle frog, which was known to inhabit the area.

Pearce said the wetlands were of biological significance and the concept plan provided for a 50-metre buffer around them to protect vegetation. He said bandicoots appeared able to adapt to some changes in habitat and the proposed development would protect the wetlands and much of the site rather than grassing the area.

The turtle frog was also considered manageable because it spent much of its life underground. Pearce said the wetlands did not appear to be associated with the draft environmental protection policy for Swan coastal plain lakes because they were not protected by regulations prohibiting drainage into wetlands.

An implementation group had been established to oversee the proposal, including representatives from the EPA and Conservation and Land Management as advisers on environmental matters.

Hunt said it was disappointing the appeal had been dismissed, but acknowledged that environmental concerns could still be addressed through other avenues.