Posted on September 10, 2014 by Frances Tse

Flexible biodiversity offsets allowed for major projects

In my earlier post, I reported on the role of biodiversity offsets in the development assessment process. It is now clear that biodiversity offsets still have a clear role to play. The Office of Environment and Heritage (‘OEH‘) has recently published a new policy document titled ‘NSW Biodiversity Offsets Policy for Major Projects’ (‘Major Projects Offsets Policy‘) which will allow flexibility in biodiversity offset requirements for major projects in some circumstances.

The  Major Projects Offsets Policy applies to State significant development under Division 4.1 of Part 4 of the Environmental Planning and Assessment Act 1979 and State significant infrastructure under Part 5.1 of that Act. The Policy will commence on 1 October 2014 and is intended to be implemented for ‘a transitional period of 18 months’ after which ‘it is intended that legislative change will be made to formalise this approach to biodiversity assessment and offsetting in the planning approval process.’

The OEH’s existing principles for the use of biodiversity offsets (‘Existing Principles‘) which can be found on its website will still apply to development other than State significant development and State significant infrastructure.

The main difference between the principles in the Major Projects Offsets Policy and the Existing Principles is that there is flexibility for developers in the event that no like-for-like offsets are available.

Offsetting in a like-for-like manner means that species, plant community types and habitat that are affected by development are offset with the same species, plant community types and habitats.

The Existing Principles require biodiversity offsets to offset impacts of development on the basis of like-for-like or better conservation outcomes.

While offsetting in a like-for-like manner is the primary position under the Major Projects Offsets Policy, where a developer is unable to locate like-for-like offsets, it could:

• apply ‘variation rules’ to offset vegetation and species impacted with similar vegetation types and species (this does not apply to critically endangered species or threatened species and  ecological communities that are listed under the  Environmental Protection and Biodiversity Conservation Act 1999 (Cth)), or
• provide funds for ‘supplementary measures’ such as actions outlined in threatened species recovery programs, actions that contribute to threat abatement programs, biodiversity research and rehabilitating degraded aquatic habitat.

The Major Projects Offsets Policy is supported by the ‘Framework for Biodiversity Assessment’ which sets out the process for assessing biodiversity impacts on a proposed development site and determining the biodiversity offset requirements for those impacts.

In my earlier post on the case of Bulga Milbrodale Progress Association v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48, I reported that the Land and Environment Court refused approval to an extension of a coal mine because, amongst other things, the offset strategies proposed would not adequately compensate for its significant impact on endangered ecological communities.

Part of the offset strategy proposed by the mining company involved conserving remote biodiversity areas which did not include any of the affected ecological communities, and  contributing funds towards research on the affected biodiversity. Preston CJ applied the Existing Principles in that case and held that those offset strategies were not appropriate.

With the implementation of the Major Projects Offsets Policy, those comments made by Preston CJ in the Bulga case may no longer apply.

An article in the Sydney Morning Herald on 8 September 2014 states that the proposed Shenhua Watermark open-cut coal mine near Gunnedah will most likely be the first major project to use the Major Projects Offsets Policy. It may be that the Policy will assist other mining developments such as the Warkworth mine extension the subject of the Bulga case to gain approval.