Posted on November 10, 2021 by Stuart Simington and Katie Mortimer 24

‘Avoid, minimise, offset’ and SAII under the Biodiversity Conservation Act 2016: more teeth than appreciated?

Recent cases demonstrate that there is currently a poor appreciation of proponents’ obligations to prioritise biodiversity avoidance and minimisation measures before resorting to offsets under the NSW Biodiversity Offsets Scheme (BOS).

Also, in a potentially very significant development, the Court appears to have widened the understanding of what is to be regarded as a serious and irreversible impact (SAII) on biodiversity values for the purposes of the Biodiversity Conservation Act 2016 (BC Act). The finding has ramifications for the permissibility of a range of developments on land containing endangered ecological communities, threatened species and critical habitat.

Primacy of the Avoidance of Impacts on Biodiversity Values

The BC Act establishes a hierarchy for dealing with the impact of development on biodiversity values, firstly by way of avoidance of impacts, secondly by minimisation of them and for offsets as the last resort. As the following cases demonstrate, the development industry has frequently been placing primary reliance on offsets.

IRM Property Group (No. 2) Pty Ltd v Blacktown City Council [2021] NSWLEC 1306 (IRM)

In this case, an applicant seeking to subdivide land for future industrial purposes, proposed that part of the site be dedicated under a proposed biodiversity stewardship agreement (BSA) with the remainder of the land to be cleared and filled for the industrial use. The Council argued that there was insufficient avoidance of the clearing of certain land identified on the biodiversity values map.

In refusing the application, Commissioners Bish and Speers held that under the BC Act it is necessary to consider whether appropriate steps have been taken to meet a specified purpose of s1.3 of the BC Act, to ‘avoid, minimise and offset the impacts of proposed development and land use change on biodiversity’. They stated this was a ‘hierarchical approach’ relying on Preston CJ’s decision in Denoci Pty Ltd v Liverpool City Council [2020] NSWLEC 102 considering the ‘mitigation hierarchy’ of the previous regime, being the Threatened Species Conservation Act 1995. 

On the facts in IRM, the appropriate steps had not been taken because there had not been sufficient or appropriate avoidance as the primary measure. The Commissioners said:

52. Section 6.4 of the BC Act sets out the purpose of the BOS… This clause establishes a requirement to identify appropriate biodiversity conservation measures to offset or compensate for impacts on biodiversity values, after steps are taken to avoid or minimise those impacts. It is the established requirement to ‘avoid or minimise’ impacts on biodiversity values that separates the experts.

…

54. Pursuant to s 6.4(1) of the BC Act, we consider that the applicant must firstly demonstrate appropriate and sufficient steps have been taken to avoid or minimise impact to areas with vegetation mapped with biodiversity values, and only then if satisfied that this is achieved, the relevant biodiversity conservation measures should be considered to offset or compensate any impacts such as from clearing, as described below:

The Commissioners did not accept that the proposed development had ‘sufficiently or firstly‘ taken steps to avoid or minimise impacts to biodiversity values on the site by reason of extensive clearing of native vegetation with biodiversity values to create proposed development lots. Because of that, the Commissioners were not required to consider further the applicant’s proposal to retire biodiversity offset credits.

Tomasic v Port Stephens Council [2021] NSWLEC 56 (Tomasic)

Preston CJ’s judgment in Tomasic was delivered 2 days following judgment in IRM. The applicants in Tomasic sought to subdivide land into residential lots, including the removal of vegetation classified as an endangered ecological community (EEC).

In finding that the proposed subdivision would have unacceptable impacts on the EEC, Preston CJ set out the regulatory framework created by the BC Act and stated that:

169. … The biodiversity mitigation hierarchy requires, in order, avoiding impacts, minimising impacts and only then offsetting or compensating for residual impacts that remain after all steps are taken to avoid or minimise these impacts. The proposed subdivision fails to take all appropriate avoidance and minimisation measures.

Preston CJ found that as the applicant had not implemented the avoidance measures agreed by the parties’ ecologists to allow for retention of the highest condition EEC, the proposal failed to appropriately avoid. In addition, inadequate minimisation measures were proposed. Together these inadequacies lead to an unacceptable risk that the proposed subdivision would have adverse effects on the EEC.

Planners North v Ballina Shire Council [2021] NSWLEC 120 (Planners North)

Most recently, in Planners North, Preston CJ dealt with an application for a manufactured home estate (MHE) proposed on a sensitive low lying site subject to coastal inundation.

The portion of the site not proposed to be developed had become the subject of a biobanking agreement (BBA) entered into as part of a strategic planning process that saw the balance rezoned for residential development. One of the problems for the Applicant was that the rezoned land still contained a large component of vegetation comprising certain EECs and potential habitat for threatened species.

The Applicant argued that there had been appropriate avoidance because the land the subject of the BBA would be retained and undeveloped by the proposal.

But Preston CJ disagreed. The non-development of the BBA land was not able to be considered as an avoidance measure under the BC Act hierarchy because that land could not be developed for the purposes of a MHE. This was because relevant environmental planning instruments such as the Manufactured Home Estates SEPP and the Coastal Management SEPP prevented consent being granted on such land owing to its status as a wetland, but also because of the BBA itself.  Preston CJ said:

173. … Avoidance of the impact of a development on land presupposes that that development is otherwise permitted to be carried out on the land. If land is not permitted to be developed for a purpose, there can be no avoidance of the impact of a development that cannot be carried out on the land in any event.

It followed that the development effectively proposed no avoidance whatsoever because almost the whole of the development site including the EECs on it were to be cleared for the MHE.

The Court did not accept the Applicant’s argument that to ignore the strategic planning history would be inconsistent with orderly planning. Rather, Preston CJ focused on the primacy of the provisions of the BC Act which, we note, are expressed to prevail over Part 4 of the Environmental Planning and Assessment Act 1979 to the extent of any inconsistency. In that sense, the zoning of the development site for residential development under the EPA Act was an irrelevancy when it came to a determination whether an obligation arose under the BC Act for reasonable avoidance of impacts on biodiversity values in accordance with the avoid, minimise, offset hierarchy.

Serious and Irreversible Impacts on Biodiversity Values

Further, in Planners North Preston CJ considered the operation of section 7.16 of the BC Act. That provision prohibits consent being granted to development with impacts on biodiversity values that are ‘serious and irreversible’ as defined in the Act.

The Regime for SAII

SAII on biodiversity values of a proposed development are the serious and irreversible impacts on biodiversity values that would remain after any proposed measures to avoid or minimise the impact on biodiversity values of the proposed development have been taken: [174].

Under clause 6.7(2) of the Biodiversity Conservation Regulation (BC Reg), an impact is to be regarded as serious and irreversible if … it is likely to contribute significantly to the risk of a threatened species or ecological community becoming extinct because—

(a) it will cause a further decline of the species or ecological community that is currently observed, estimated, inferred or reasonably suspected to be in a rapid rate of decline, or

(b) it will further reduce the population size of the species or ecological community that is currently observed, estimated, inferred or reasonably suspected to have a very small population size, or

(c) it is an impact on the habitat of the species or ecological community that is currently observed, estimated, inferred or reasonably suspected to have a very limited geographic distribution, or

(d) the impacted species or ecological community is unlikely to respond to measures to improve its habitat and vegetation integrity and therefore its members are not replaceable.

Section 6.5(2) of the BC Act permits the Environment Agency Head to provide guidance on the determination of any such SAII, and criteria to assist in the application of the principles and lists of potential serious and irreversible impacts. Preston CJ noted the relevant criteria set out in Appendix A of “Guidance to assist a decision-maker to determine a serious and irreversible impact” (September 2019) and noted that in the Guidance the Department had:

• applied the criteria in Appendix A to all threatened species and threatened ecological communities listed under the BC Act
• identified entities that meet the criteria under one or more of the principles in cl 6.7 of the BC Reg as entities at risk of a SAII
• provided a framework for decision-makers to take into account the scale of an impact and the potential for avoidance and mitigation within the context of the principles involving five steps:

• • Step 1: Identify relevant entities at risk of a SAII
  • Step 2: Evaluate the extinction risk of the entity to be impacted
  • Step 3: Detail measures taken to avoid, minimise and mitigate impacts on the entity
  • Step 4: Evaluate a serious and irreversible impact
  • Step 5: Decision-making

Preston CJ’s Findings in respect of SAII

For the three EECs on the development site, and by reference to their relevant Final Determinations, Preston CJ held that the impacts on them were serious and irreversible on the basis of the criteria in cl6.7(2)(a) and (b): see [177].

Importantly, and at least in circumstances where there was no avoidance or minimisation of the impact upon them, the Court’s satisfaction of criteria (a) or (b) appears to have been definitional of the existence of the requisite likely significant contribution to the risk of extinction.

Preston CJ did not make any express independent finding of the significance of the development’s incremental contribution to the risk of extinction but rather merely applied the content of the respective Final Determinations to criteria (a) and (b):

• for clause 6.7(2)(a): His Honour found that the proposed development would cause a further decline of the EECs that were, by reference to their Final Determinations, currently in a rapid rate of decline because the proposed development reduced their geographic extent on the development site.
• for clause 6.7(2)(b): His Honour found that the proposed development would further degrade or disrupt the three EECs on the site which were by reference to the Final Determinations already severely degraded or disturbed. His Honour said at [182]:

“The Final Determinations for the Coastal Saltmarsh EEC, Swamp Oak Floodplain Forest EEC and Freshwater Wetlands EEC describe the current severe environmental degradation of these communities. The proposed development will exacerbate this environmental degradation and disrupt biological processes, including removing habitat for the species assemblages of the communities and for the threatened fauna species that forage, roost or breed in the communities.”

This approach is a significant development in the application of clause 6.7 of the BC Reg and understanding of SAII, for the reasons we discuss below.

Conclusions

The three cases discussed demonstrate that proponents cannot rely on either the zoning of land or the provision of offsets as being sufficient to justify the acceptability of proposed development in so far as it relates to impacts on biodiversity values.

On the approach taken in the three cases, development proposals that do not implement reasonable avoidance measures to avoid impacts on EECs, threatened species or critical habitats, appear to be more difficult to justify under the ‘avoid, minimise, offset’ hierarchy than has been widely appreciated.

Of possibly greater significance, however, Preston CJ’s decision in Planners North appears to stand for the proposition that impacts can constitute an SAII whether or not the incremental impact of a development can be shown to be likely to contribute significantly to the relevant risk of extinction. On the basis of Preston CJ’s findings, a consent authority will not need to prove via evidence that an impact does in fact meet the criteria contained in section 6.7(2) of the BC Reg. The finding can be made on the basis of the contents of the Final Determinations. The decision on this aspect of the BC Act appears to us to likely be a very significant hurdle for a wide range of developments, for example, those proposing further clearing of Cumberland Plains Woodland in the Sydney basin.

You can read the decisions discussed in this post here:

• Planners North v Ballina Shire Council [2021] NSWLEC 120
• Tomasic v Port Stephens Council [2021] NSWLEC 56
• IRM Property Group (No. 2) Pty Ltd v Blacktown City Council [2021] NSWLEC 1306

The authors acted for the Councils in the Planners North and IRM matters. If you wish to discuss this post, please contact Stuart Simington on 8235 9704 or Katie Mortimer on 8235 9716.