Posted on August 25, 2020 by Anna Sinclair and Stuart Simington

Is it mandatory to consider the biodiversity offsets proposed in a DA ?

A recent decision by the Land and Environment Court provides some guidance on how a proposal to offset biodiversity impacts must be considered in determining a development application under Part 4 of the Environmental Planning and Assessment Act 1979 (EPA Act).

Although this decision was made in the context of the former biodiversity assessment regime, we discuss what insights it provides under the new regime established by the Biodiversity Conservation Act 2016 (BC Act), in particular how a consent authority should approach any requirement to retire biodiversity credits when determining an application for development consent.


In Denoci Pty Ltd v Liverpool Local Council [2020] NSWLEC 102, Denoci Pty Ltd (Denoci) was seeking sought consent for earthworks and the removal of vegetation (being an endangered ecological community) to accommodate the future use of the land for two warehouse buildings and appealed on a question of law against the Commissioner’s decision to refuse consent.

Denoci’s development application (DA) had been made prior to the commencement of the BC Act, and therefore the former biodiversity assessment regime under s5A of the EPA Act, the Threatened Species and Conservation Act 1995 and the Biodiversity Banking and Offsets Scheme applied.

The DA proposed to offset the impacts caused by the removal of the vegetation by the purchase of biodiversity credits under the former Biodiversity Banking and Offsets Scheme (Offset Proposal).

In the initial proceedings, the Commissioner determined that the proposed development should not be approved because, in summary, it did not satisfy a number of provisions under the Liverpool Local Environmental Plan 2008 (LLEP) and the Liverpool Development Control Plan 2008 (LDCP) relating to biodiversity management and protection of the subject site.

On this basis, the Commissioner determined that it was not necessary to consider the Offset Proposal.

Appeal against the Commissioner’s decision

Denoci argued that the Offset Proposal was a mandatory relevant consideration that the Commissioner was required to have considered in determining the DA under s4.15 of the EPA Act. This was because it was part of the development application and it was a matter of public interest. Had the Commissioner done so, Denoci argued that the Commissioner’s findings in relation to the provisions of the LLEP and LDCP may well have been different.

Decision of the Court

The Court relevantly held that the Offset Proposal was not a mandatory relevant consideration.

This was because those statutory provisions frame generic matters that a consent authority, or the Court on appeal exercising the functions of the consent authority, is bound to take into consideration in determining a development application, but they did not require consideration of these generic matters at the level of particularity argued by Denoci.Whilst the Court found that it would be permissible for the Commissioner to consider the Offset Proposal in taking these generic matters into consideration, the Commissioner was not bound to consider the Offset Proposal.

Further, even if it could be said that the Offset Proposal was a mandatory relevant consideration, the obligation to consider the Offset Proposal did not arise given the way that the Commissioner decided the appeal. The Commissioner found that the proposed development did not sufficiently avoid or mitigate the adverse impacts on biodiversity on the subject land, and that it would result in such significant residual impacts on biodiversity that consent should not be granted. The issue of offsetting the significant residual impacts therefore did not arise, and accordingly the Commissioner was not required to consider the Offset Proposal for this reason also.

Application to biodiversity offset requirements under the BC Act

This decision was made in the context of the former biodiversity assessment regime. The BC Act now sets out the biodiversity assessment regime for DAs made under the EPA Act.

A DA that meets or is above the biodiversity offsets scheme (BOS) threshold, or which is likely to significantly affect threatened species, must be accompanied by a biodiversity development assessment report (BDAR).

Importantly, s7.13(2) of the BC Act provides that when a consent authority is determining an application for development consent under Part 4 of the EPA Act, it is required to consider the likely impact of the proposed development on biodiversity values as assessed in the BDAR.

In contrast to the former biodiversity assessment regime considered in Denoci , as the BDAR is required to specify the biodiversity credits that are required to be retired to offset the residual impacts on biodiversity values to which the BOS applies, we think that a consent authority would have to consider any offset proposal under the new regime.

That being said, the BDAR is just one of a number of mandatory relevant considerations that a consent authority must take into account when considering a DA. Based on Denoci, even if the BDAR is a mandatory consideration, a consent authority should still carefully consider whether the obligation to consider the BDAR (and any offset requirement) arises in the determination of a DA.

For example (and as was the case in Denoci), where a consent authority may refuse development consent because the proposed development does not satisfy a provision of an environmental planning instrument or DCP, because biodiversity impacts are not sufficiently avoided or mitigated, the issue of offsetting may not arise. Whilst the consent authority would likely have to consider the BDAR in respect of the impact on biodiversity values, it may not be required to consider any offset dealt with in the BDAR.

Further, the BC Act and the EPA Act do not indicate what weight a consent authority is required to give to the BDAR when determining an application for development consent. Therefore, where the BDAR is required to be considered, it seems that it would be sufficient ‘consideration’ of the document provided more than lip service is given to it.

A copy of the judgment is here.

If you have any questions about this blog, please contact Stuart Simington on 8235 9704 or Anna Sinclair on 8235 9713.