Landowners can generate income by selling biodiversity
Biobanking is a market-based scheme created to offset the loss
of biodiversity on sites as a result of development. The NSW
Biobanking scheme commenced in the middle of 2008 by virtue of the
new Part 7A of the Threatened Species Conservation Act 1995
Why are developers interested?
The Biobanking scheme is an alternative to the "7 Part
Test" for assessment of threatened species (which may include
preparing a species impact statement) under the Environment
Planning and Assessment Act 1979 (NSW).
Why are landowners interested?
Landowners can generate income by selling biodiversity credits
in relation to land that may not otherwise be developed by
protecting native vegetation or threatened species or both.
Landowners may establish biobank sites by entering into
biobanking agreements with the Minister.
The landowner's promise to maintain or improve biodiversity
values on a biobank site creates biodiversity credits. These
biodiversity credits may be bought and sold.
A purchaser of biodiversity credits may offset the loss of
biodiversity on a development site by retiring biodiversity
A developer can obtain a biobanking statement from the Director
General which sets out the measures and the biodiversity credits
required to be retired for its development.
A biobanking statement can be obtained at any time before
development consent is issued. Developers are not required to
retire the credits until after development consent is granted.
The Director General may refuse to issue a biobanking statement
where the developer has not demonstrated that all cost-effective
measures are being carried out to minimise any negative impact of
the development on biodiversity values.
The underlying legal structure is that the developer's
development consent will require the retirement of a specific
number and type of biodiversity credits, which the developer will
satisfy by purchasing biodiversity credits from a selling
A biobanking agreement is registered on the title to the land
and is binding on landowners, their successors in title and
mortgagees in possession.
A biobanking agreement requires landowners to undertake
management actions. Management actions include controlling weeds,
controlling erosion, retaining dead timber, monitoring and record
Landowners must report (including annual reports) on compliance
with the biobanking agreement and are entitled to management
payments from the BioBanking Trust Fund to assist with the cost of
carrying out the management actions.
BioBanking Trust Fund
The BioBanking Trust Fund is managed by a fund manager appointed
by the Minister.
When a biodiversity credit is first transferred from one
landowner to another (usually on the first sale of the biodiversity
credits) the present value of all management payments under a
biobanking agreement must be paid into the BioBanking Trust
Payments to the BioBanking Trust Fund are made in priority to
payments to the landowner.
The money paid into the BioBanking Trust Fund is held on trust
for the landowner.
Payments to the landowner start when 80% of the total fund
deposit has been received by the BioBanking Trust Fund.
No management payments will be made if there are insufficient
funds available in the BioBanking Trust Fund.
Dealing with the land
Landowners wanting to transfer ownership of land or subdivide
land the subject of a biobanking agreement must notify the
If the land is to be subdivided, the landowner's obligations
under the biobanking agreement will be separated and attributed, as
appropriate, to the relevant parts of the subdivided land.
If a lease or licence is entered into over the land, that lease
or licence must incorporate the relevant requirements of the
biobanking agreement and be consistent with the biobanking
Varying or ending a biobanking agreement
The Minister may vary or terminate a biobanking agreement if it
will not negatively impact the biodiversity values of the biobank
If a landowner does not comply with its obligations under a
biobanking agreement the Minister may order a landowner to carry
out work at their own cost to rectify the non-compliance.
Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).