Australia: NSW mining, petroleum and extractive industries face new land acquisition and mitigation measures
Clayton Utz Insights

Key Points:

The use of voluntary land acquisition and mitigation rights for land owners has been clarified under a new framework to manage dust and noise impacts from mining, petroleum and extractive industry developments.

On 19 December 2014, the NSW Government published a policy which describes in detail how it will deal with predicted noise and dust impacts from State significant mining, petroleum production and extractive industry proposals in determining planning applications for those proposals.

Entitled the Voluntary Land Acquisition and Mitigation Policy, the Policy indicates when the Government will consider approving a State significant development (SSD) proposal which is predicted to exceed relevant noise or dust assessment criteria, and describes the mitigation and land acquisition obligations which will be required of proponents in order to obtain approval.

On the same day:

• State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) was amended to require consent authorities to consider the Policy when determining an application for development consent, or for modification of an existing consent for SSD; and
• the Mining SEPP and State Environmental Planning Policy (State and Regional Development) 2011 (SRD SEPP) were amended to remove the requirement for development consent for onshore petroleum exploration, so that this activity will be subject to assessment requirements similar to those for mining exploration.

The Policy applies to all future applications and to all applications which had been made but not determined before 19 December.

How the Policy deals with noise and dust impacts

The Policy confirms that SSD projects in these industries must incorporate all reasonable and feasible avoidance or mitigation measures to minimise the noise and dust impacts before the voluntary mitigation and land acquisition framework will apply.

However, the Policy acknowledges that there may be circumstances where it is in the public interest for a project to proceed even though it is predicted not to meet the noise or dust assessment criteria in applicable Government policies or guidelines after those measures have been incorporated.

Consequently, the Policy establishes a framework for ensuring that land owners are given a legally enforceable right deal with the consequences of noise or dust impacts exceeding the assessment criteria, in the form of:

• a negotiated agreement between the land owner and the project operator; or
• obligations on the project operator to offer mitigation of impacts on the land, or acquisition of the land, in accordance with conditions of the project approval.

The Policy expresses a preference for negotiated agreements, but specifies some minimum requirements for those agreements if they are to justify the grant of a planning approval.

The Policy also specifies the kinds of mitigation commitments, and the terms of land acquisition offers, which would be required in any approval conditions imposed under the Policy. Significantly, it appears that approval conditions regarding land acquisitions would require offers to a land owner:

• to include not only an affected parcel of land but also "any contiguous lots owned by the same land owner at the date of the approval"; and
• to include not only the market value of the land to be acquired but also all other categories of compensation which apply to the compulsory acquisition of land by government authorities under the Land Acquisition (Just Terms Compensation) Act 1991 (such as disturbance and any "special value" of the land to the land owner) – these could substantially increase the total acquisition cost.

The Policy also specifies the terms on which land which a project operator has had to acquire, whether under a negotiated agreement or a condition of approval, may be used post-acquisition.

Triggers for measures under the Policy

The Policy provides specific triggers for the use of approval conditions granting voluntary mitigation rights and voluntary land acquisition rights, which are based on the degree of predicted exceedance of the relevant assessment criteria and the application of a "net benefit" test for the project.

The Policy applies only to residences on privately owned land for noise impacts, but it applies to both residences and workplaces on privately owned land for dust impacts. A "workplace" is defined to:

"include a lawfully operating office, industrial premises or intensive agricultural enterprise where employees are grouped together in a defined location, but does not include broad-acre agricultural land, heavy, hazardous or offensive industry or businesses intentionally located close to mining operations".

Effect of the Policy

Although the Policy states that it documents current NSW Government practice, it appears to go further than current practice in areas such as its application to workplaces, the scope of acquisition compensation, requirements on negotiated agreements, and requirements for the use of acquired land post-acquisition.

However, the Policy should provide more clarity and certainty for project proponents and land owners in addressing the way in which noise and dust impacts are addressed.

Development consent no longer required for petroleum exploration

As indicated earlier in this note, the Mining SEPP and the SRD SEPP were amended to remove the need for development consent for petroleum exploration activities (including the five wells rule), and also to remove petroleum exploration from the list of SSD.

As a result, the Mining SEPP will make petroleum exploration permissible without the consent in the same way as mining exploration is. Mining exploration is subject to environmental assessment under Part 5 of the Environmental Planning and Assessment Act 1979 instead of a requirement for separate planning approval, and the assessment is considered by the Division of Resources and Energy when determining an application or an exploration licence. Petroleum exploration will now be treated in the same way.

There are no changes to the requirements for development consent for petroleum production activities.

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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.