Posted on October 5, 2022 by Lindsay Taylor and 6

ALERT: Amendments to EPA Act & Regulation to Manage Council-Related Development Application Conflict of Interest

Local councils in New South Wales from time to time make development applications seeking consent to carry out development on land they own, occupy or otherwise control while at the same time being the consent authority responsible for determining the application under the Environmental Planning and Assessment Act 1979 (‘EPA Act‘). The conflict of interest arising in such circumstances is readily apparent.

The Environmental Planning and Assessment Amendment (Conflict of Interest) Regulation 2022 (‘Conflict of Interest Regulation‘) amends the Environmental Planning and Assessment Regulation 2021 (‘EPA Reg‘) to require councils to manage conflicts of interest arising in relation to ‘council-related development applications‘, and amends Schedule 1 of the EPA Act to make provision for community participation requirements concerning such applications.

The Conflict of Interest Regulation will take effect on 3 April 2023.

New clause 9B(2) of Schedule 1 to the EPA Act will define ‘council-related development application‘ to mean:

‘… a development application, for which a council is the consent authority, that is—

(a)  made by or on behalf of the council, or

(b)  for development on land—

(i)  of which the council is an owner, a lessee or a licensee, or

(ii)  otherwise vested in or under the control of the council.’

For the purposes of section 2.22 of the EPA Act, new clause 9B(1) of Schedule 1 will specify that the minimum public exhibition period for a council-related development application is 28 days.

The key amendments that the Conflict of Interest Regulation will make to the EPA Reg are as follows:

• a council-related development application must be accompanied by a management strategy, being a statement specifying how the council will manage conflicts of interest that may arise in connection with the application because the council is the consent authority, or a statement that the council has no management strategy for the application (see new section 30B),
• a council-related development application must not be determined by the consent authority unless the council has adopted a conflict of interest policy and considers the policy in determining the application (see new section 66A(1)),
• a ‘conflict of interest policy’ means a policy that:

‘(a)  specifies how a council will manage conflicts of interest that may arise in connection with council-related development applications because the council is the consent authority, and

(b) complies with the Council-related Development Application Conflict of Interest Guidelines published by the Department and available on the NSW planning portal.’

(See new section 66A(2))

• a council’s register of development applications and development consents kept in accordance with section 240 of the EPA Reg must contain the following information about a development consent granted to a council-related development application:

‘(i)  conflicts of interest that may arise in connection with the application because the council is the consent authority, and

(ii)  measures taken by the council to manage the conflicts of interest.’

(See new section 240(3)(m1))

The Department of Planning and Environment has published guidelines titled ‘Council-related Development Application Conflict of Interest Guidelines‘ (‘Guidelines‘). The Guidelines require that a council’s conflict of interest policy concerning council-related development applications must:

• establish management controls and/or a management strategy to address potential conflicts of interest at the different phases of the development process for the types of council-related development that the council could be involved in,
• outline the process through which potential conflicts of interest will be identified, the risks assessed and appropriate management controls determined, and
• outline the process that will be followed to publicly communicate the management approaches for each development subject to the policy.

The Guidelines provide a sample conflict of interest policy and a sample management strategy statement, both which can be used as a template by councils for the preparation of their own documents.

The Guidelines recommend as best practice that council conflict of interest policies should also address conflicts that may occur after development consent has been granted to council-related development applications.

You can access the Conflict of Interest Regulation via this link.

You can find a copy of the Guidelines via this link.

If you want to discuss the issues raised in this post, please contact Dr Lindsay Taylor or Ming Gu.