Australia: Coal mine extension case has a rich seam of key lessons for environmental lawyers

Last Updated: 11 May 2013
Article by Andrew Poulos

Key Points:

Where a proposed development has clear and significant impacts on various aspects of the environment it is essential that the mitigation measures proposed can adequately deal with those impacts.

A recent decision not to allow the extension of a coal mine attracted much press, but the decision in Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48 is significant for reasons other than the immediate news value.

The case is significant for what it said about:

  • where a proposed development has clear and significant impacts on various aspects of the environment it is essential that the mitigation measures proposed can adequately deal with those impacts. Key impacts on biodiversity, noise, dust and social matters could not be adequately mitigated; and
  • assessing the impacts and the mitigation measures the Court had reference to the principles of ESD.

The proposed extension to the mine

The owners of the existing open cut Warkworth mine sought an extension. The mine operates under a development consent issued in May2003. This contained a number of conditions including conditions requiring conservation of areas of native vegetation and landforms to the north, west and south of the mine designated non-disturbance areas and habitat management areas.

The Project application sought to discharge the obligations under the 2003 development consent to permanently protect certain areas by about half.

Bulga Milbrodale Progress Association Inc commenced proceedings in the Land and Environment Court against the decision of the delegate of the Minister for Planning and Infrastructure, the Planning and Assessment Commission to grant approval under Part3A of the Environmental Planning and Assessment Act 1979 (Planning Act).

The appeal commenced by Bulga is known as an "objector" appeal in the Court's Class1 jurisdiction. The entitlement for an objector appeal arises only if certain matters are satisfied. One of these is that but for the operation of Part3A, the Project would be classified as a "designated development" (thus requiring an EIS) and subject to the provisions of Part4 of the Planning Act. Since the repeal of Part3A of the Planning Act objector appeals still exist in respect of State significant development, but not for State significant infrastructure.

The Court's jurisdiction in Class1 matters is a merit review jurisdiction in which the Court exercises all of the functions and discretions of the Minister in respect of the Warkworth project application. In making its decision, the Court is to have regard to any other Act, the circumstances of the case and the public interest (section39(4) of the Land and Environment Court Act 1979).

What did the Court have to determine?

In the context of determining whether or not to grant approval to the Part3A application, the Court considered the:

  • impacts on biological diversity, including on endangered ecological communities (EECs);
  • noise impacts and dust emissions on the residents;
  • social impacts of the community of Bulga; and
  • economic issues.

What are the statutory matters for consideration?

The Court held that the matters to be taken into account when determining whether to approve or disapprove the Project are not only those matters expressly stated in sections75J(1) and (2) of the Planning Act, but also those matters which, by implication from the subject matter, scope and purpose of the Planning Act are required to be considered.

Identifying the relevant implied matters is to be assessed by looking at the objects of the Planning Act. It found:

  1. the principles of ecologically sustainable development (ESD) are a matter to be taken into account as aspect of the consideration of the "public interest"; and
  2. public interest includes community responses regarding the Project for which approval is sought, however, a fear or concern without rational or justified foundation is not a matter which, by itself, can be considered as an amenity or social impact.

The Court's power to attach conditions

In terms of the Court's power to attach conditions to an approval it was held that an approval permitting the carrying out of the Project the subject of the application for approval could not have attached a condition regulating a different project on different land not the subject of the application for approval.

Significant adverse impacts on biological diversity

The Court held that the Project would be likely to have a significant adverse impact on biological diversity including on four EECs. Those impacts would not be mitigated by the Project, nor would biodiversity offset and other compensatory measures proposed be likely to compensate for the significant biological diversity impacts. In this regard, the Court noted:

  1. Around 30% of the main part of the Warkworth Sands Woodlands EEC would be cleared and mined for the Project – a significant amount. It was also noted that a number of areas of EEC were not within conservation reserves or national parks increasing the significance of the loss caused by the Project. In fact, the Court found that the Warkworth Woodlands EEC satisfied the criteria to be listed as critically endangered under the both the Threatened Species Conservation Act 1995 and the Federal Environment Protection Biodiversity Conservation Act 1999 ; and
  2. the permanent protection of another EEC (as required in the 2003 development consent) would be impossible as it was within the proposed mine extension.

The Court held that there was no avoidance of impacts on EECs and that there were no avoidance measures adopted by Warkworth to reduce the real risk of extinction of the WSW EEC in the medium term. Importantly, the Court stated:

"There is no priority afforded to mineral resource exploitation over other uses of land, including nature conservation. There must be an assessment of all of the different, and often competing, environmental, social and economic factors in order to determine what is the preferable decision as to the use of land. Warkworth's economic analysis is a tool to assist in the decision-making process, but it is not a substitute or determinative ..... The question of whether there can be avoidance of impacts on components on biological diversity, including on the WSW EEC, is part of the fact finding and consideration of the relevant matters regarding environmental impacts of the Project, which occur earlier in the process of decision-making, and should not be answered by the later tasks of weighting and balancing all of the relevant matters (environmental, social and economic) to be considered by the Court as decision-maker in arriving at the preferable decision."

The efficacy of the offsets

The Court examined the seven areas of existing vegetation communities which were proposed to be conserved in perpetuity as direct offsets and determined that the offset package did not adequately compensate for the Project's significant impacts on affected EECs, nor would the direct offsets provide sufficient, measurable conversation gain for the particular components of biological biodiversity impacted by the Project, particularly the affected EECs.

Noise and dust impacts

One of the key issues in respect of noise was that the noise impacts were considered for both Warkworth and Mount Thorley mines. Each mine is separately owned and has its own separate consent with different noise criteria for residents in Bulga.

Warkworth submitted that the combined approach was justified because of the high number of residents that become entitled to request mitigation or land acquisition than would otherwise be the case for Warkworth alone on the 2003 consent, and noise levels are expected to drop once the operations at Mount Thorley cease.

The legal difficulty confronted by the Court is that it is required to assess the likely noise impacts of the mine that is the subject of the present application and any conditions imposed on a project approval must relate to that project and be capable of implementation by whomever is carrying out the activities authorised by the approval.

A condition imposed on an approval granted in the proceedings could not purport to impose obligations on the operator of a separate mine (Mt Thorley) that is subject to its own consent. It is unlikely that any such condition would have sufficient nexus with the Project that is the subject of the present proceedings so as to satisfy the relevant legal test which require that the conditions of consent fairly and reasonably relate to the Project. Furthermore, any approval granted to Warkworth for the proposed extension could not require or preclude the operator of Mount Thorley seeking approval to alter its operations or to extend its operations past the expected cessation of that mine in 2017.

The Court concluded that the noise criteria proposed in the conditions of the Project Approval were not appropriate. The noise impacts of the Project on the residents of Bulga would be intrusive and adversely affect their reasonable use, enjoyment and amenity of the village and the surrounding countryside. The noise mitigation strategies were unlikely to reduce noise impacts to levels that would be acceptable and, indeed, could result in greater social impacts.

Furthermore, in relation to equity issues the Court stated that "the costs resulting from the residual impacts will be borne by the residents of Bulga who are the noise receivers, but the benefits of the Project will be enjoyed by others, including Warkworth. The burdened residents of Bulga will not be compensated effectively by Warkworth. There will not be full internalisation by Warkworth of the external costs of the Project, occasioned by its noise impacts, on the Bulga residents".

Dust and air quality

The Court held that combining the air quality criteria for Warkworth and Mount Thorley mines is of doubtful legal validity but in any event it is likely to be difficult to monitor and enforce compliance and as with the noise impacts, no confident conclusion can be reached that the air quality impacts of the Project will be acceptable in practice and with complying with the proposed conditions of approval.

Social impacts

The Court examined the positive and negative social impacts and concluded that "the Project's impacts in terms of noise, dust and visual impacts and the adverse change in the composition of the community by reason of the acquisition of noise and air quality affected properties, are likely to cause adverse social impacts on individuals and the community of Bulga. The Project's impacts would exacerbate the loss of sense of place, and materially and adversely change the sense of community, of the residents of Bulga and the surrounding countryside".

Economic impacts

A decision-maker should consciously address the principles of ESD in dealing with any application or a project under the former Part3A of the Planning Act.

The Court was not satisfied that the economic benefits of the Project outweighed the environmental, social and other costs. In regard to the Input-Output cost analysis the Court found that it only looked at economic impacts, not environmental or social impacts. The Court found that neither the Benefit Costs Analysis (BCA) and the Choice Modelling considered adequately or give sufficient weight to the principles of ESD. With respect of intergenerational equity (which involves people within present generation having equal rights to benefit from the exploitation of resources as well as from the enjoyment of a clean and health environment), the BCA and Choice Modelling failed to consider adequately the burdens that would be imposed on some entities, including the people of Bulga and the components of biological diversity in the Bulga environment, and on the ability of those entities to live in and enjoy a clean and healthy environment. This failure limited the utility of the economic analyses.


The case will be studied closely by many in the environment and planning field for the guidance it gives on the Court's role in reviewing these decisions.

It is also significant to note that the decision to approve may also have been challenged on the basis that it was manifestly unreasonable. This is because the impacts of the proposed development were so significant and that the mitigation measures were insufficient to deal with those impacts that a Court may well have considered that no reasonable decision-maker could have come to the decision that the Minister came to in respect of the Warkworth mine project.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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