On 3 May 2016, the NSW Government published public consultation drafts of the Biodiversity Conservation Bill 2016, and the Local Land Services Amendment Bill 2016 (together, the Draft Bills).

If enacted, the Draft Bills would effect sweeping reform to the State's biodiversity conservation laws, including expanding the role of offsetting for developments with biodiversity impacts.

BACKGROUND

The Draft Bills follow on from the final report of the Independent Biodiversity Legislation Review Panel entitled A review of biodiversity legislation in NSW (Report), presented to government on 18 December 2014. In March 2015, the NSW Government committed to implementing all 43 of the Report's recommendations.

The Report favoured an approach that would:

  1. simplify the legislative framework by repealing existing biodiversity conservation laws and enacting a single Biodiversity Conservation Act;
  2. encourage a broader application of offsetting through expansion of existing mechanisms such as biodiversity certification and BioBanking, as well as implementation of a new State-wide biodiversity offsets fund; and
  3. focus on conserving biodiversity and ecological integrity at a bioregional and State level.

KEY CHANGES UNDER THE DRAFT BILLS

  1. Consolidation of legislation

The Draft Bills would substantially remodel NSW biodiversity laws, repealing and replacing the:

  1. Threatened Species Conservation Act 1995 (and with it the Threatened Species Conservation Regulation 2010 and Threatened Species Conservation (Biodiversity Banking) Regulation 2008);
  2. Nature Conservation Trust Act 2001; and
  3. Native Vegetation Act 2003 (and with it the Native Vegetation Regulation 2013).

The Draft Bills would also replace parts of the National Parks and Wildlife Act 1974 and will make consequential amendments to a suite of other legislation.

The draft Biodiversity Conservation Bill 2016 (Draft Biodiversity Bill), the central pillar of the reforms, is divided into 14 parts. Several key parts of the Draft Biodiversity Bill are discussed as follows.

  1. New framework for protecting threatened wildlife (Part 2)

The Draft Biodiversity Bill proposes a new, risk-based approach to regulating wildlife interactions that would replace the existing licence-based framework under the National Parks and Wildlife Act 1974. Under the new approach, there would be three tiers of wildlife interactions that would otherwise be prohibited:

  1. exempt activities listed in the regulations, which would be able to be carried out in certain circumstances with a licence and without any reporting or record keeping requirements;
  2. activities able to be carried out in compliance with a code of practice, without the need to obtain a licence; and
  3. activities authorised by a biodiversity conservation licence.
  1. Areas of outstanding biodiversity value (Part 3)

The Draft Biodiversity Bill would provide for an area to be declared an "area of outstanding biodiversity value". As a result, the Minister for the Environment would be required to take reasonable steps to enter into a private land conservation agreement with an owner of such land. Private land conservation agreements would be made under Part 5 of the Draft Biodiversity Bill (see paragraph 5 below) and could be specified to apply for either a temporary period or exist in perpetuity.

  1. Changes to threatened species identification (Part 4)

The process for listing threatened plants and animals would be largely carried over to the new Biodiversity Conservation Act, if enacted. The threat categories will be updated to align with International Union for Conservation of Nature standards. For example, species that are currently "presumed extinct" will be categorised as "extinct", and an ecological community may be listed as a "collapsed ecological community".1

The Draft Biodiversity Bill will facilitate the work of the Threatened Species Scientific Committee (Committee, being the Scientific Committee established under the Threatened Species Conservation Act) by expanding the scope of provisional listing, allowing the Committee to quickly list species that, for example, are under immediate and significant threat of extinction.2

The Draft Biodiversity Bill also provides for an expansion of the Saving Our Species Program, and the NSW Government has committed to investing $100 million over five years.3

  1. New system of conservation agreements with private landowners (Part 5)

Under Part 5 of the Draft Biodiversity Bill, there would be three types of private land conservation agreements:

  1. biodiversity stewardship agreements, which would provide for permanent protection of biodiversity on private land in exchange for an upfront payment and ongoing payments to support management of the site;
  2. conservation agreements, which could be permanent or finite, and would be supported by smaller stewardship payments to landholders; or
  3. wildlife refuge agreements, which would be able to be terminated at any time, or converted into conservation agreements or biodiversity stewardship agreements.

The NSW Government intends to commit $240 million over the next five years, and $70 million per annum (escalated with inflation) thereafter, to be used by the Biodiversity Conservation Trust (BCT) for the purpose of entering into and administering private land conservation agreements with landholders. This monetary contribution will be additional private funds contributed under the new biodiversity offsets scheme (discussed further below).

It is the NSW Government's intention that this simpler framework will be more accessible for landholders, and that the payments from the BCT will incentivise landowners to enter into conservation agreements.

  1. New biodiversity offsets scheme (Parts 6 and 7)

The reforms would establish a single biodiversity offsets scheme, intended to improve consistency and streamline timeframes in assessing and offsetting the biodiversity impacts of development.

Under the scheme, a new Biodiversity Assessment Method (BAM) would be used to assess biodiversity value at a particular site.4 This would replace other methods, including Species Impact Statements, the BioBanking Assessment Methodology and the Framework for Biodiversity Assessment, among others.

The BAM is intended to be more scientifically robust, consistent and transparent than existing methodologies. It is also intended to provide guidance on how a developer could apply the "AMO principle" (prioritising avoidance, then minimisation, then offsetting of biodiversity impacts). The BAM guidelines would be required to be followed where a proposed development either triggered the existing "significant effect" threshold or the new BAM threshold.

Development consent would not be able to be granted for a development assessed under the BAM to have "serious and irreversible impacts on biodiversity values" (except for development that is classified as State significant development or State significant infrastructure under the Environmental Planning and Assessment Act 1979 (EPA Act)).5

The new scheme would modify the existing market-based system, allowing developers to offset obligations by:

  1. generating biodiversity credits (such as by establishing a biodiversity stewardship agreement) and retiring them;
  2. purchasing biodiversity credits and retiring them; or
  3. making a payment into the Biodiversity Conservation Fund (BCF).

This BCF would be managed by the BCT (see paragraph 8 below) and would be used to secure offsets on the basis of developer payments.

The regulations would prescribe that offsets must be "like-for-like or better", meaning they must replace the biodiversity values being lost or target higher conservation priorities. However, the regulations would also outline a process for varying the "like-for-like" requirements, leaving it open for the consent authority to determine on a case by case basis whether an offset obligation for a development should be reduced.6

  1. Biodiversity certification (Part 8)

The Draft Biodiversity Bill contains a new biodiversity certification framework to replace the existing scheme in Part 7AA Threatened Species Conservation Act 1995 (NSW).

Currently, only planning authorities may apply to the Minister for biodiversity certification.7 Under the new framework, any person would be able to apply to the Minister for biodiversity certification, with landowner's consent.8 By allowing developers to pursue biodiversity certification, the NSW Government aims to improve certainty for developers while also allowing councils to focus on proposals that are of most benefit to their local government area.

The new framework would also introduce a two tier system of certification:

  1. regular proposals for biodiversity certification; and
  2. proposals that are declared by the Minister to be "strategic applications for biodiversity certification" (Strategic Applications), following application of criteria prescribed in the regulations.

The order conferring biodiversity certification would determine which approved conservation measures would apply. For either category, this could include the retirement of biodiversity credits or an equivalent payment to the BCF. For Strategic Applications, additional approved conservation measures could be specified, including:

  1. reservation of land under the National Parks and Wildlife Act 1974;
  2. adoption of development controls (or State infrastructure contributions) under the EPA Act to conserve or enhance the natural environment; or
  3. any other measure determined by the Minister for the Environment.

This added flexibility for Strategic Applications is intended to provide an incentive for planning authorities to undertake proactive biodiversity certification, integrating biodiversity concerns into strategic planning and commencing biodiversity impact assessment before development occurs in a local government area.

The NSW Government also intends to provide financial encouragement for Strategic Applications by:

  1. providing planning authorities with low interest loans to cover the cost of offsets and assessment in biodiversity certification; and
  2. designing a mechanism for recovering certification costs through a levy or similar biodiversity contribution.
  1. A new Biodiversity Conservation Trust to replace the Nature Conservation Trust (Part 10)

The Draft Biodiversity Bill would create the BCT, replacing the existing Nature Conservation Trust (NCT). Unlike the NCT, the new BCT would be constituted as a statutory body representing the Crown. The BCT would have broader functions and powers than the NCT, including powers to:

  1. negotiate, enter into and administer private land conservation agreements, and assist in the enforcement of compliance with those agreements;
  2. provide loans and other financial assistance to planning authorities, to assist with applications for biodiversity certification;
  3. manage and control the BCF, and establish and maintain the Biodiversity Conservation Trust Public Fund (replacing the Revolving Fund Scheme and the Public Fund in ss 7 and 27A of the Nature Conservation Trust Act 2001 (NSW));
  4. acquire, transfer and retire biodiversity credits;
  5. enter into private land conservation agreements as land owner; and
  6. as with the existing NCT, buy, sell, or otherwise deal with land with a legally binding conservation agreement attached.
  1. New land management framework (Local Land Services Act 2013 (NSW))

The draft Local Land Services Amendment Bill proposes the repeal of the Native Vegetation Act 2003 (and with it the Native Vegetation Regulation 2013), and establishment of a new risk-based framework for clearing native vegetation to enable ongoing agricultural land management. This framework would be based around the Native Vegetation Regulatory Map under the amended Local Land Services Act 2013 (NSW) (LLS Act). The Map would identify land on which the clearing of native vegetation is:

  1. exempt from the new land management framework under the LLS Act (because, for example, it has already been cleared);
  2. regulated by the LLS Act; or
  3. excluded from the application of the LLS Act and instead regulated by the EPA Act and the new Biodiversity Conservation Act, as well as other legislation.

On regulated land, certain low-risk native vegetation clearing activities that are part of routine land management would not require a formal approval or notification to LLS. In addition, landowners would be able to clear native vegetation in accordance with published codes of practice.

IMPLICATIONS

Whether or not the reforms, if enacted, will assist in realising strategic planning goals in areas of biodiversity significance remains to be seen.

The NSW Government has attempted to strike a balance between the need for development to meet the demands of a growing society and the implications for biodiversity of identifying and expanding into new sites for development.9

However, by expanding the scope of offsetting, the proposed reforms heighten the risks and implications inherent with this policy approach. The offsets approach has been subject to criticism on the basis that:

  1. it can only compensate for lost biodiversity rather than prevent the loss from occurring;10
  2. the permanent "retirement" of a biodiversity credit is illusory – future governments may legislate to "unlock" reserved land at any time;
  3. as has been demonstrated via application of current offsets policies, there are inherent difficulties in establishing a functioning market for biodiversity credits; and
  4. in theory, a credit should only come from protecting biodiversity value that is at risk of being lost (for example, by clearing or development).11 If pressure to establish a supply of credits undermines this principle, then the coherence, fairness and effectiveness of the offset system will be reduced.

The new offsets scheme will need to limit demand for biodiversity credits by keeping avoidance and mitigation of biodiversity impacts as its primary objective in accordance with the AMO hierarchy principle. At the same time, it will need to provide a supply of credits that are appropriately capable of offsetting biodiversity loss. The BAM, and the incentives for individual landholders to create and sell credits, need to be carefully designed with these issues in mind.

It will also be crucial that the biodiversity certification process is appropriately implemented, to allow developers to accurately factor in biodiversity risk early in the planning stages for a prospective development.

The public consultation period for both Draft Bills extends until 28 June 2016. Submissions may be made here.

Footnotes

1 S 4.6 draft Biodiversity Conservation Bill.

2 Part 4, Division 4, draft Biodiversity Conservation Bill.

3 Part 4, Division 6, draft Biodiversity Conservation Bill.

4 Part 6 Division 2 draft Biodiversity Conservation Bill.

5 S 7.17 draft Biodiversity Conservation Bill.

6 S 7.15 draft Biodiversity Conservation Bill.

7 S 126J Threatened Species Conservation Act 1995.

8S 8.5 draft Biodiversity Conservation Bill.

9 The Hon Justice Brian J Preston, 'Biodiversity Offsets: Adequacy and efficacy in theory and practice' (2016) 33 Environmental Planning Law Journal 93.

10 The Hon Justice Brian J Preston, 'Biodiversity Offsets: Adequacy and efficacy in theory and practice' (2016) 33 Environmental Planning Law Journal 93.

11 The Hon Justice Brian J Preston, 'Biodiversity Offsets: Adequacy and efficacy in theory and practice' (2016) 33 Environmental Planning Law Journal 93, 111.

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