Posted on November 25, 2024 by Katie Mortimer 2

ALERT: Bill to reform the biodiversity offsets scheme passed in the first step to make NSW ‘nature positive’

On Friday the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024 (Bill) was passed by NSW Parliament. The Bill will significantly amend the Biodiversity Conservation Act 2016 (BC Act) on a date to be proclaimed.

The Bill follows a 2023 independent review of the BC Act which recommended fundamental reform, finding that the Act as currently in force is ‘not meeting its primary purpose of maintaining a healthy, productive and resilient environment, and is never likely to do so.’  The review recommended the legislation enshrine a ‘nature positive’ vision, meaning the environment is being repaired and regenerated.

The NSW Government’s response to the review, the ‘NSW plan for nature’, committed to rewriting the BC Act to affect a nature positive approach. The Bill is the NSW Government’s first step in reforming biodiversity laws. It was introduced in August 2024 and then referred to the Legislative Council Portfolio Committee No. 7 – Planning and Environment for inquiry and report. The Committee conducted two public hearings and received 57 submissions, ultimately recommending the Bill proceed to debate by the Legislative Council and that stakeholder concerns be addressed during debate. Amendments were made by the Legislative Council in response to the Committee’s report.

Key Changes to the BC Act 

Key changes to the BC Act are below.

Detail is lacking on a number of the changes which will be given effect by amendments to the Biodiversity Conservation Regulation 2017 (BC Reg) which are presently unavailable.

Defining the ‘avoid, minimise and offset hierarchy’ and making it an element of the BOS 

• Proponents will now need to demonstrate that they have taken ‘all reasonable measures’ to avoid the impacts of an action on biodiversity values when applying the biodiversity offsets scheme (BOS). A new definition of the ‘avoid, minimise and offset hierarchy‘ will be inserted via new section 6.3A:

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.

• The hierarchy will be included as a purpose of the Act and an element of the biodiversity offsets scheme, with section 6.2 of the Act including a new element recognising the hierarchy as ‘the key principle for avoiding, minimising and offsetting impacts on biodiversity values when carrying out biodiversity assessments and preparing reports under the scheme’.

Requiring biodiversity assessment reports to assess ‘genuine measures’ undertaken to avoid and minimise, with corresponding assessment standards 

• Biodiversity development assessment reports and biodiversity certification assessment reports will be required to assess the ‘genuine measures‘  that proponents have undertaken or propose to take, to avoid and minimise the impacts of development, activities or clearing, via changes to what must be included in those reports in s6.12(2) and s6.13(b).
• New section 6.16(1A) will allow the BC Reg to provide assessment standards for genuine measures and requirements for biodiversity assessment reports to include information demonstrating whether genuine measures meet those standards. No detail on those assessment standards is presently available.

Transitioning the BOS to net positive biodiversity outcomes via a yet to be released strategy 

• New section 6.2A(1) to the Act will provide that: The biodiversity offsets scheme will transition to net positive biodiversity outcomes.
• To give effect to this objective, the Minister must make a strategy for the transitioning of the BOS to deliver net positive biodiversity outcomes. The strategy must specify the actions required and include targets and time frames for the transition.
• The biodiversity assessment method must then have regard to the targets and time frames set out in the strategy and adopt a standard that in the opinion in the Minister, will result in ‘net positive biodiversity outcomes in NSW’ via new section 6.7(3).
• No draft of the strategy is presently available. The Bill requires the strategy to be made as soon as practicable after s6.2A commences, and it must be subject to public consultation.

Preventing payments to the Biodiversity Conservation Fund to retire biodiversity credits in prescribed circumstances

• New Division 5A will be inserted to the Act to allow the BC Reg to prescribe circumstances where a person must not satisfy a requirement to retire biodiversity credits by paying into the Biodiversity Conservation Fund.
• The Bill does not indicate what those circumstances may be. This change will be affected via future amendments to the BC Reg.
• New section 6.29A of the Act provides that the retirement of biodiversity credits may be satisfied by undertaking ‘prescribed biodiversity conservation measures’. Those measures will be determined in accordance with the BC Reg. Details of those amendments to the BC Reg are also not presently available.

Changing requirements for the Biodiversity Conservation Trust

• The Biodiversity Conservation Trust (BCT) will be required to apply money from the Fund to retire either ‘like-for-like’ biodiversity credits provided for in the offset rules, or a biodiversity credit provided for in the variation rules. This will occur via an amendment to section 6.31.
• A new ‘acquittal period’ will be introduced requiring the BCT to apply money to a BCF offset biodiversity credit within 3 years after the amount was paid into the Fund. If the BCT does not do so, it must enter into an agreement with the Minister as to how it will meet its obligation.

Introducing flexible application of the Act in certain circumstances

• New section 7.2(3) will allow the BC Reg to prescribe development which is effectively carved out of being ‘likely to significantly affect threatened species’ and the consequent requirement for biodiversity assessment under the Act. In the Second Reading Speech, it was stated the intention of this change was to reduce the burden of the BOS on regional communities where the scheme has disproportionate financial impacts.
• New section 7.7(3) allows the Minister to make orders exempting development from the requirement to be accompanied by a biodiversity assessment report in connection with a natural disaster, or if the Minister’s opinion there are exceptional circumstances.

Requiring additional public registers 

• Public registers will be required of the following additional decisions, aimed at increasing transparency in the Act’s application:
  • orders made under s7.7(3) exempting development from biodiversity assessment requirements,
  • decisions where approval authorities were required to consider ‘serious and irreversible impacts on biodiversity values’ (and either approved or refused applications)

Introducing a new concurrence power for SSD and SSI 

• Section 7.14 of the Act will be amended to introduce a new concurrence requirement for state significant development or state significant infrastructure, requiring the approval authority to consult with the Minister administering the Act if they propose to reduce the biodiversity credits required to offset the residual impact on biodiversity values, from those contained in the biodiversity assessment report.

Creating a process to amend the Biodiversity Values Map 

• New section 7.4(3) of the Act will allow the BC Reg to include provisions for landholders to apply to amend the Biodiversity Values Map.

The Bill is silent on savings and transitional provisions that would applying to pending applications, which will be accompanied by biodiversity assessment reports that will not meet the new requirements of the amended Act.

You can read the Bill as passed here: Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024.

The Legislative Council Portfolio Committee’s Report on an earlier version the Bill is here: Report No. 22 – Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024

Links to our earlier posts related to the Bill are below:

• The introduction of the Bill: ALERT: Bill to reform the biodiversity offsets scheme introduced to NSW Parliament
• The Independent Review of the BC Act: Findings of the Independent Review of the Biodiversity Conservation Act 2016
• The NSW Government’s response to the review, the NSW Plan for Nature: ALERT – NSW Government announces significant amendments to biodiversity legislation to make NSW contribute to ‘nature positive’

To discuss this post contact Katie Mortimer on 8235 9716.