NSW Government’s Biodiversity Reform Package – Implications for Mining

The NSW Government has released a proposed reforms to the State’s biodiversity legislation.  It proposes to bring together the Native Vegetation Act, Threatened Species Conservation Act, parts of the National Parks and Wildlife Act into one Biodiversity Conservation Act (along with some amendments to the Local Land Services Act.  The regulations are not on exhibition.

 

The reforms bring about very significant changes for rural landholders.  The changes for State Significant Development are less momentous as the scheme for offsetting for SSD largely reflects the Major Projects Offsets Policy (MPOP) that was introduced on 2014.

 

The NSWMC Biodiversity Working Group is preparing a submission which is due on 28 June 2016.

 

Timeframes 

The Government are saying that they want to introduce the legislation this year.  There are a number of products that make up the reform package that require the legislation to be created and will a statutory consultation period, such as the Biodiversity Assessment Methodology (BAM).  This will add time to the reforms being fully operational.

 

Until the legislation is introduced the MPOP and Framework for Biodiversity Assessment (FBA) will continue to apply to State Significant Developments (SSD).

 

State Significant Development Approvals and Offsetting 

Major elements of reform to assessment and offsetting for SSD projects are set out below.

 

Assessment Process

• The avoid, minimise, offset hierarchy remains.
• The MPOP and FBA will be replaced by the Act and the regulations and the Biodiversity Assessment Methodology (BAM).
• There will be a threshold at which the BAM must be applied to the assessment of impacts on biodiversity.  The threshold is based on a combination of lot size and clearing volume.  The Government has provided three options for discussion.  The “significant effect” trigger will also remain and override the BAM threshold.
• The outcome of a BAM is a Biodiversity Development Assessment Report (BDAR).
• SSD projects will be required to undertake an assessment under the BAM and produce a BDAR. 
• Decision makers for SSD projects must take the into account the BAR and the offsets required by it when deciding on the projects and conditions but is not bound by it (unlike other forms of development).
• Tg scores will be replaced by a new concept, Threatened Species Multipliers (TSM).  It is likely that the multipliers will be set by expert panels, however this has not yet been decided by OEH and the process of setting the multipliers has yet to begin.
• Matters for further consideration are replaced by “serious and irreversible impacts”.  Only SSD projects with these impacts can be approved. Criteria to identify the species and communities that constitute serious and irreversible impacts will be set out in the regulations and a list an thresholds will be set out in a publicly available schedule.

Offsets

• The primary form of security for offsets that are owned and managed by a developer will be the Biodiversity Stewardship Agreement (BSA), which will replace and be very similar to BioBanking Agreements.
• The Biodiversity Conservation Bill provides for the setting up of a Biodiversity Conservation Trust (BCT).  Developers will be able to convert a credit requirement to a cash amount to be paid to the BCT.  Upon payment the offsetting requirement is discharged and it is the responsibility of the BCT to secure the required credits. See below for detail on the calculator.
• Rehabilitation of mine sites will be able to generate biodiversity credits.
• Supplementary measures are replaced by Biodiversity Conservation Actions (BCAs) that will sit at the bottom of a hierarchy of offsets. Developers will only be able to propose BCAs where like for like and variations of the like of like rules have been exhausted.  

 

Offsets Payment Calculator

The offsets payment calculator will be a much more complex model than previously discussed.  It will provide a specific price for each individual credit type. This is different from the model which is being proposed for the Upper Hunter Strategic assessment which proposes only two prices, one for ecosystem credits and one for species credits species.

 

The model to calculate the price considers both the traded price of credits (where enough data is available) as well as a costs model (considers the management cost and the opportunity cost of the land).

 

The price will include a 7% administration fee which is not a surprise.  It will also include a “risk loading” to mitigate against the risk that the price will not be enough to meet the actual costs incurred by the trust.  It is difficult to see how this is justified given that the data that the price is based (for management costs) on is already discounted and the discount rate should reflect risk.

 

Variation rules

Where it can be demonstrated that a like for like offset cannot be found the following variation rules apply::

 

Where a person can demonstrate that they have not been able to find a ‘like for like’ offset a varied offset may be used. It is proposed that the variation rules allow:

impacts on vegetation must be offset with vegetation that is from the same vegetation formation (not constrained by locality) and is:

• a plant community type in the same or higher threat status group or
• a plant community type associated with the same threatened ecological community.
• impacts on species (that are not associated with a plant community type) must be offset with species:
• for fauna species, in the same order that uses similar habitat to the species impacted
• for flora species, with the same life-form (i.e. tree, shrub, orchid etc.) as the species impacted
• in the same locality and
• that is under the same or greater level of threat (e.g. if the species impacted is listed as endangered, the species in the offset must be listed as endangered or critically endangered).
• The variation rules appear very similar to the rules that apply under the MPOP.  However the rule for impacts on vegetation are expressed differently and will require close expert review.

Listing of species

The listing process will be largely unchanged with the NSW Scientific Committee continuing to assess and determine listing.

The following changes are proposed:

• To introduce “Areas of Outstanding Biodiversity Value” that will be identified and protected.  Areas of critical habitat that are currently listed will become AOBV
• Remove listing of populations (unless the species is not otherwise listed)
• Introduced “collapsed” ecological communities, which the submission guide states are the same as extinct communities
• The Committee will be able to invite nominations on particular themes.

There may be a future change to the assessment method as the States, Territories and Commonwealth have produced a common assessment method.