Posted on August 15, 2024 by Katie Mortimer 4

ALERT: Bill to reform the biodiversity offsets scheme introduced to NSW Parliament

A Bill to reform the biodiversity offsets scheme (BOS) established by the Biodiversity Conservation Act 2016 (BC Act) was introduced to NSW Parliament today.

The Bill is the NSW Government’s first step in delivering the NSW Plan for Nature, which acknowledged that the BC Act was not meeting its primary purpose and required substantial amendment – see our blog here. This post summarises some key changes proposed by the Bill.

Introduction of an ‘avoid, minimise and offset hierarchy’ to the BC Act 

The Bill proposes to insert a definition of the ‘avoid, minimise and offset hierarchy‘  to the BC Act. Proposed new section 6.3A to the BC Act is:

Avoid, minimise and offset hierarchy 

For the purposes of the biodiversity offsets scheme, the avoid, minimise and offset hierarchy is the principle that avoiding, minimising and offsetting the impacts of actions on biodiversity values be approached as follows—

(a) the proponent of the action first takes all reasonable measures to avoid the impacts of the action on biodiversity values,

(b) after taking all reasonable measures under paragraph (a), the proponent then takes all reasonable steps to minimise the impacts that have not been avoided,

(c) having taken the measures under paragraph (b), the proponent then takes biodiversity conservation measures under the biodiversity offsets scheme to offset or compensate for any residual impact on biodiversity values.

Currently the BC Act establishes a ‘framework’ to avoid, minimise and offset the impacts of proposed development and land use change on biodiversity, but the Act does not explicitly refer to a hierarchy. This amendment would recognise the hierarchy that the Land and Environment Court has been applying in practice.

The hierarchy will be given effect via insertion as a purpose of the Act and an element of the BOS (the BOS is then applied throughout biodiversity assessment).

Requirement for ‘genuine measures’ to avoid and minimise impacts 

In 2023 the independent review of the BC Act led by Dr Henry AC (often referred to as the Henry Review) recommended that clear guidance be provided on requirements in the BC Act to avoid and minimise impacts.

The Bill proposes to amend the definitions of ‘biodiversity development assessment report’ and ‘biodiversity certification assessment report’ in the BC Act, to require that a report:

(c) sets out and assesses, in accordance with the biodiversity assessment method and the regulations—

(i) the genuine measures the proponent of the proposed development, activity or clearing has taken to avoid and minimise the impact of the proposed development, activity or clearing on biodiversity values of the land, and

(ii) the genuine measures the proponent of the proposed development, activity or clearing proposes to take to avoid and minimise the impact of the proposed development, activity or clearing on biodiversity values of the land, and …

The BC Act would also be amended so that the regulations may make provision about:

• principles that apply to the taking/proposed taking of genuine measures to avoid and minimise impacts (in both biodiversity assessment and when seeking biodiversity certification)
• assessment standards against which genuine measures are to be assessed,
• requirements for biodiversity assessment reports to include information demonstrating whether the genuine measures meet the assessment standards.

The proposed ‘avoid, minimise and offset hierarchy’ would require proponents to take ‘all reasonable measures‘ to avoid or minimise impacts, whereas biodiversity assessment reports will need to assess ‘genuine measures‘.

If the Act is amended as proposed, no doubt dispute will arise as to what truly is ‘all reasonable measures’ in particular circumstances, having regard to the context of a site and application.

Transitioning the BOS to net positive 

As foreshadowed in the NSW Plan for Nature and sought in the Henry Review, the BOS is proposed to transition to net positive.

The Bill does not propose a definition of ‘net positive’ be inserted to the BC Act, but the term is generally understood as meaning that the environment is being repaired and regenerated, rather than the current approach in the BC Act of ‘no net loss’.

Proposed new section 6.2A requires that: The biodiversity offsets scheme will transition to net positive biodiversity outcomes. To give effect to this, the Minister administering the BC Act will be required to make a strategy for the transitioning of the BOS to net positive as soon as practicable after the commencement of that section. The strategy must:

• specify the actions required and include targets and time frames for the transition to delivering net positive biodiversity outcomes under the BOS,
• be published on an appropriate government website,
• be reviewed every 12 months,
• be the subject of public consultation pursuant to Part 9 of the BC Act.

Other Changes 

Other proposed changes of note are:

• a provision that the biodiversity assessment method (BAM) may include provisions of a savings and transitional nature consequent on the amendment or replacement of the BAM,
• as an alternative to the retirement of biodiversity credits, a person may undertake prescribed biodiversity conservation measures or in particular circumstances, pay into the Biodiversity Conservation Fund,
• provisions enabling the Environment Agency Head to issue directions to accredited persons in respect of preparation and modification of biodiversity assessment reports,
• requirements that the Biodiversity Conservation Trust must meet obligations in respect of offser biodiversity credits within 3 years of the credit amount being deposited into the Fund, unless agreement is reached with the Minister.

The Bill proposes various updates to Part 7 of the BC Act, which governs the biodiversity assessment required for development or activities proposed under the Environmental Planning and Assessment Act 1979. The Bill is silent on savings and transitional provisions for biodiversity assessment reports currently under consideration. We will post further on these changes and their impact once the Bill is passed.

The tabling copy of the Bill is available here: Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024

To discuss this post please leave a comment or contact Katie Mortimer on 8235 9716.