Australia: NSW Government increases scrutiny on mining and coal seam gas proposals

Last Updated: 11 March 2012
Article by Clive Cachia, David Cinque and Russell Lyons


The NSW Government has announced draft plans to protect high quality agricultural land and its water sources from "inappropriate" mining and coal seam gas proposals, following the release of its draft strategic plans for regional land use in the Upper Hunter and New England North West regions of NSW (Strategic Plans). See attached maps of these regions for easy reference.

Major mining and coal seam gas proposals in these areas must now pass through a "gateway" process, and will only be considered for approval if they satisfy a scientific assessment by an independent panel (Gateway Panel). which will operate at arms length from the Government Once an application to the Gateway Panel is lodged it will be publicly exhibited for 21 days and submissions from stakeholders will be sought.

In conjunction with the proposed Strategic Plans, the Government has also released an Aquifer Interference Policy and Coal Seam Gas Code of Practice, both of which will also significantly impact the approval process.

Factors considered by Gateway Panel

The "gateway process" will apply to state significant mining and coal seam gas projects on or within 2 kms of strategic agricultural land. The Gateway Panel will assess such proposals in the following two key types of strategic agricultural land:

1. Biophysical strategic agricultural land

The Gateway Panel will consider whether the proposal will significantly reduce agricultural productivity of land due to:

  • surface area disturbance and subsidence
  • the impact on soil fertility
  • increases or changes in soil salinity or acidity
  • the impacts on highly productive groundwater, in accordance with the Aquifer Interference Policy.

2. Critical industry clusters

For clusters of significant agricultural industries that are potentially impacted by coal seam gas or mining development (Critical Industry Clusters), the Gateway Panel will also consider the impact of such developments on access to agricultural resources, support services, infrastructure, transport routes or the loss of scenic and landscape values.

Critical Industry Clusters are described in the Strategic Plans as those industries that meet the following criteria:

  • a concentration of enterprises that provides clear development and marketing advantages and is based on an agricultural product
  • the productive industries are related
  • they consist of a unique combination of factors such as location, infrastructure, heritage and natural resources
  • they are of a state, national and/or international importance
  • they contribute to the region's identity
  • they are potentially substantially impacted by coal seam gas or mining proposals.

The Strategic Plans currently identify two Critical Industry Clusters, being the equine cluster around Scone, Denman and Bylong and a viticulture cluster around Broke and Pokolbin. Additional Critical Industry Clusters may be identified during the consultation process.

The Gateway Panel will also consider whether a proposal would be in the public interest through a cost benefit analysis undertaken in accordance with the Government's cost benefit methodology, which is yet to be released.

Aquifer Interference Policy

The Government has also released a draft Aquifer Inference Policy in conjunction with its draft land use policies. It contains strict criteria to prevent harm to water sources or dependent ecosystems as a result of coal seam gas and mining. The Gateway Panel must consider the impacts of aquifer interference, such as leakage from adjacent water sources induced by depressurisation, aquifer compaction and loss of storage, the creation or enhancement of hydraulic connections within and between water sources and subsequent loss of flow or pressure, and cross-contamination or change to ambient water quality in water sources.

If an application passes the gateway process, it is exempt from the requirement of aquifer interference approval under the Water Management Act later in the planning process.

Coal Seam Gas Code of Practice

The proposed draft Code of Practice applies to coal seam gas exploration and sets mandatory standards of consultation with the community during the exploration phase, including ongoing landowner contact, wider consultation with relevant stakeholders, the conduct of staff and sub-contractors on site, and the treatment and disposal of waste water.

Outcomes of gateway process

Proposals that pass the gateway process receive a gateway certificate and can proceed to lodgement of a development application and the full merits assessment process. Proposals that do not pass the gateway cannot proceed to development application lodgement.

Right of appeal

The Strategic Plans provide for no right of appeal to a Gateway Panel decision. Decisions made by the Gateway Panel are final and binding on the Government.


Until the Strategic Plans are finalised, all new development applications for mining and coal seam gas projects (as well as associated infrastructure) are required to submit an Agricultural Impact Statement. Such statements must address impacts on productivity, support services, critical mass thresholds, water movement away from agriculture, visual amenity, landscape values and tourism.

The Strategic Plans are currently on public exhibition until Thursday 3 May 2012 along with the draft Aquifer Interference Policy and Coal Seam Gas Code of Practice. The Government has invited members of the public to make submissions through community consultation forums and information sessions held in the regions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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