The biodiversity conservation reforms introduced sweeping changes to the NSW planning system and have significantly altered the way in which biodiversity is assessed, managed and offset. The reform package introduced a raft of new statutory instruments, including:

  • The Biodiversity Conservation Act 2016 (BC Act)
  • The Local Land Services Act 2013 (as amended by the Local Land Services Amendment Act 2016)
  • The Biodiversity Conservation Regulation 2017 (BC Regulation)
  • The Biodiversity Conservation (Savings and Transitional) Regulation 2017 (Savings Regulation).

This new legislation had the effect of repealing and replacing previous biodiversity legislation, including the Threatened Species Conservation Act 1995, Nature Conservation Trust Act 2001, the Native Vegetation Act 2003, and parts of the National Parks and Wildlife Act 1974 and the Fisheries Management Act 1994.

While the reforms commenced back on 25 August 2017, the effects of these changes are only now being felt, particularly having regard to extensive savings and transitional provisions.

In the recent decision in Kate Singleton Pty Ltd ACN 106 774 001 and S J Connelly CCP Pty Ltd ACN 125 970 783 (trading as Planners North ABN 56 291 496 553) v Ballina Shire Council [2018] NSWLEC 1306 (Planners North), the Land and Environment Court (Court) rejected a council's attempt to impose a condition of consent requiring a biodiversity stewardship agreement (BSA) to be entered into in relation to land that was the subject of a development application.

The case raises a number of important matters that should be considered, particularly when navigating this transitional phase of the reforms and also when considering the appropriateness of any requirements for permanent conservation measures during the DA process.

Requirement to enter into a BSA

The main point of contention at the hearing was Council's proposed condition which required that a BSA be entered into in relation to each of three lots within the proposed residential development.

The applicant argued that the obligation to enter into a BSA was unreasonable, and that the condition should be deleted, because:

  • the BC Act did not apply, as the application was a "pending or interim planning application" under the provisions of the Savings Regulation and was thus governed by the former planning provisions
  • there is no requirement for an offset under the applicable DCP, LEP or the former Threatened Species Conservation Act 1995 (TSC Act)
  • the condition was "unreasonable, unprecedented, unwarranted and problematic".

The respondent council submitted that the condition should be retained because:

  • it provided the "best practice" to protect the three lots in question
  • even if the BC Act didn't apply, the TSC Act provided the opportunity to offset impacts via a Biobanking Agreement
  • the condition could be reasonably complied with and provided certainty for the future protection of the lots.

The Court upheld the appeal and rejected the proposed condition. Importantly, it noted that the appeal had been lodged prior to the commencement of the BC Act on 25 August 2017, and thus under the Savings Regulation the BC Act did not apply. The Court also accepted that a BSA is a voluntary mechanism, and the applicant could not be required to enter into one in order to comply with the DCP or the TSC Act. Moreover, there was no certainty that the Office of Environment & Heritage would agree to enter into a BSA on the site. Without greater certainty, the Court considered that the inclusion of such a condition would not be appropriate in any approval.

The case raises a number of important matters, including a consideration of what is a BSA and the requirements under the BC Act governing a BSA.

The Biodiversity Offset Scheme and BSAs

The Biodiversity Offset Scheme

One of the key aspects of the BC Act is the establishment of the Biodiversity Offsets Scheme (BOS). Where a proposed development or activity is likely to significantly affect threatened species, the BC Act provides that the BOS will apply.

Put simply, the BOS is a system for offsetting the impacts associated with development or clearing through the purchase and retirement of 'biodiversity credits'. The BC Act sets out when the BOS applies and the assessment requirements for various developments. The credits are generated by people who have entered into BSA establishing a biodiversity stewardship site (stewardship site) on their land.

What are BSAs?

Similar to a biobanking agreement under the previous TSC Act, a BSA is an agreement between a landholder and the Minister for Environment, whereby the landholder must carry out certain 'management actions' at a site which are funded by payments to a Biodiversity Stewardship Payments Fund.

As a result of undertaking these management actions, landholders are able to generate and sell credits to developers who are required to purchase and retire credits to offset the impact of their development under the BOS. These credits essentially represent the improvement to biodiversity resulting from the protection and management of the site.

However, a BSA cannot be entered into with respect to any land, and there are requirements that must be satisfied before a stewardship site can be established on this land, as set out below. Furthermore, the costs and implications of entering into a BSA are not negligible and, therefore, a landowner should seek detailed advice prior to deciding to enter into a BSA.

Eligibility criteria

Section 5.5 of the BC Act states that:

  1. The Minister may enter into an agreement relating to land with all the owners of the land for the purpose of establishing a biodiversity stewardship site (a biodiversity stewardship agreement).
  2. A biodiversity stewardship agreement may designate any eligible land to which the agreement relates to be a biodiversity stewardship site for the purposes of this Act.
  3. The Minister must consult with the Minister for Planning and the Minister for Industry, Resources and Energy before entering into any biodiversity stewardship agreement.

This section of the BC Act is extracted to emphasise that BSAs are voluntary agreements which may only be entered into with respect to eligible land.

In addition, a site cannot be a stewardship site if the Minister is of the opinion that, for example:

  1. the proposed used of the land is inconsistent with biodiversity conservation;
  2. the proposed use will prevent relevant management actions from being carried out; or
  3. the owner of the land is already under a legal obligation to carry out biodiversity conservation measures.

Ministerial discretion

Section 5.9 of the BC Act outlines certain requirements which must be satisfied before the Minister is permitted to enter into a BSA. This includes, for example, that all landowners must be party to the agreement, all mortgagees and tenants/lessees must consent to the agreement.

The Minister may also decline to enter into a BSA for a range of reasons, including where:

  • a landowner is not a 'fit and proper person'
  • an application is unclear
  • a contribution/fee is unpaid
  • there is a failure to provide additional information
  • an application is not materially different to a previously rejected application
  • the Biodiversity Stewardship Site Assessment report (which must accompany an application to enter into a BSA) has been improperly prepared; and/or
  • on any other ground the Minister considers sufficient.

Accordingly, as the Court highlighted in Planners North, numerous factors need to be considered before a condition requiring a BSA to be entered into is imposed.

For example:

  • if the BC Act does not apply because of applicable savings and transitional provisions, then it is not appropriate to seek to impose obligations under that Act
  • if the BC Act does apply, developers and consent authorities need to understand whether or not the BC Act is triggered and if so, the offset requirements that apply under the BC Act. These offset requirements will be governed by the BC Act and the BOS, being, generally speaking, an obligation to retire credits.

While BSAs might be used as a form of a permanent conservation measure, detailed advice should be first obtained, including a consideration of whether a BSA can in fact be entered into. Other ways of securing permanent conservation outcomes might be more appropriate, depending on the circumstances.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.