On 29 July 2013, the New South Wales Government released draft amendments to the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) which proposed to alter the weighting of considerations taken into account in the assessment for development applications for mining purposes in NSW. The proposed changes to the Mining SEPP provide that the economic impact of prospective mining projects are to be the "prinicipal consideration" relative to other factors (such as social and environmental impacts) during assessment.
The proposed changes follow soon after the NSW Land and Environment Court's decision to reject the proposed expansion of a Rio Tinto project in the Hunter Valley area (see commentary on the Bulga case below).
Proposed amendments to Mining SEPP
- The draft changes to the Mining SEPP introduce a criterion of "significance of resource" and make that criterion the principal consideration when determining whether to grant consent to a proposed mining development. In assessing an application, consideration must be given to the significance of the resource that is the subject of the application in terms of:
- the economic benefits of developing the resource, both to NSW and the region in which the development is proposed to be carried out; and
- any advice by the Director-General of the Department of Trade and Investment, Regional Infrastructure and Services about the relative significance of the resource in comparison with other resources across the State. In providing advice, the Director-General should cover relevant matters, including:
- the size, quality and availability of the resource;
- access and the proximity of the land to existing or proposed infrastructure;
- the relationship of the resource to any existing mine; and
- whether other industries or projects depend on the development of the resource.
- The weight given to the other matters for consideration under the Mining SEPP (which includes the compatibility of the proposed mine with other land uses in the vicinity, compatibility with other mining, petroleum or extractive industry in the vicinity, the efficiency of the resource recovery, the assessment of natural resource and environmental management, and a consideration of transport and rehabilitation issues) must be proportionate to that matter's importance in comparison with the significance of the resource.
- Developments must not be refused on the basis of certain non-discretionary development standards relating to noise levels, cumulative air quality, air-blast pressure, ground vibration and aquifer interference if the proposed development satisfies the development standards in the Mining SEPP.
- Consideration must be given to any certification of the Office of Environment and Heritage that measures to mitigate or offset the biodiversity impact of the proposed mining development will be adequate.
The NSW Government's move to provide this level of direction to a consent authority via the Mining SEPP may be a response to the landmark decision in the case of Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited  NSWLEC 48 (Bulga).
The Bulga case
On 15 April 2013, Judge Brian Preston in the NSW Land and Environment Court (Court) overturned the decision of the Planning Assessment Commission (PAC) (under delegation from the Minister for Planning) to approve the proposed extension of the Mount Thorley Warkworth coalmine operations in the Hunter Valley area. The Court disapproved the project application having regard to its findings on the significant and unacceptable impacts on biological diversity including endangered ecological communities, as well as noise, dust and social impacts. Despite the economic benefits and positive social impacts in the broader area and region, the Court held that these were outweighed by the environmental and social impacts of the project.
It is the first time a NSW court had overturned a major project approval to extend an existing open-cut mine. The decision demonstrated the Court's willingness to assess the overall environmental, social and economic impacts of such projects and, in circumstances where environmental and other factors outweigh the economic benefits, refuse major coal projects.
However, the newly released proposed amendments to the Mining SEPP seek to expressly provide guidance to a consent authority on how much weight should be given to various considerations in the assessment of applications for mining development projects in NSW.
The NSW Government's position is that the proposed amendments to the Mining SEPP are designed to improve investor confidence in the processes governing resource development in NSW and to promote NSW as an attractive investment destination by encouraging investment in the mining and mineral resources industries and reducing barriers to investment.
Some environmentalists have argued the proposed changes to the Mining SEPP represent a major threat to the local environment that will strongly favour the mining industry in the assessment of new projects, as the assessment framework moves away from the current approach of balancing economic, social and environmental factors to one that directs consent authorities to place the economic interests of mining foremost in their decisions. However, it is important to note that the provisions of policies such as the Mining SEPP are not the only matters that are relevant to the determination of such an application. The consent authority must still take into account all other factors in section 79C of the Environmental Planning and Assessment Act 1979 (NSW) in determining the development application for mining purposes, including environmental impacts on both the natural and built environments, social and economic impacts in the locality, the suitability of the site for development, and the public interest.
The decision in the Bulga case is currently being heard on appeal in the NSW Supreme Court of Appeal. Even if the Supreme Court appeal is unsuccessful, the changes to the Mining SEPP could allow Rio Tinto to lodge a new development application for consideration under the revised Mining SEPP (assuming the draft amendments are finalised in their current form). It is still uncertain, however, what effect, if any, such amendments to the Mining SEPP would have on the outcome of a new assessment of the proposed expansion.
More generally, the outcome of the appeal may have serious implications for the assessment of other mining projects, as it sets a precedent that the decisions of the Planning Minister and the independent PAC can be overruled at the end of the process, which creates a new layer of uncertainty for projects that have already been approved.
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