Australia: Will Biobanking Simplify the Development Consent Process?

Last Updated: 27 September 2006

By Peter Briggs and Claire Smith

Key Point

  • The scheme appears to be a flexible and innovative way of allowing the Government to conserve biodiversity values and meet housing supply targets, but the underlying mechanics of the scheme are not yet clear.

New biodiversity legislation currently before the NSW Parliament may offer property investors an alternative option for pursuing development activities that have previously been slowed or halted because of perceived adverse ecological impacts. The scheme, depending on its success, could also attract investors and speculative traders seeking financial gains through the generation and trading of bio-credits.

What is biobanking?

The new biodiversity banking and offsets scheme proposed by the NSW Department of Environment and Conservation (DEC) will, if introduced, allow developers in certain instances to buy biodiversity credits (bio-credits) to offset the adverse ecological impacts of their developments and use biobanking statements as alternatives to the current threatened species approval process.

The scheme will be introduced through the Threatened Species Conservation Amendment (Biodiversity Banking) Bill 2006 which will amend the Threatened Species Act 1995 to:

  • allow biobank sites to be designated if the landowner and the Minister for the Environment enter into a biobanking agreement in relation to that site;
  • create biodiversity credits from management actions undertaken or proposed to be undertaken on the biobank sites;
  • introduce a system that enables registered bio-credits to be traded and used to offset the biodiversity impacts of other developments;
  • establish a biobanking assessment methodology (by order of the Minister published in the Gazette) to determine the number or different classes of bio-credits that may be created in respect of the management actions carried out on the biobank site and identify any impact on biodiversity values that cannot be offset by the retirement of credits; and
  • allow developers to apply for biobanking statements that will list the number and class of credits that the developer must obtain and retire to offset the biodiversity impacts of the development in order to improve or maintain biodiversity values.

Importantly, biobanking agreements will be registered on the title of land (which generates the biodiversity credits) and will generally be in perpetuity. This means that the obligations in the biobanking agreement to preserve biodiversity values will be binding on successors in title to the land (in a similar way to a restrictive covenant).

An obligation to maintain and improve biodiversity values in perpetuity, however, could place an unfair burden on landholders in the future, for example, if there is a natural disaster or severe bushfire. One way the Government proposes to alleviate this is to create a Biobanking Trust Fund which would receive a proportion of the sale proceeds arising from the sale of the credits. It is possible, however, that some form of additional private insurance may be necessary to protect against any future risk of biodiversity loss.

How will the scheme work?

A hypothetical example illustrates how the scheme would work:

Landowner A owns a property with 100 hectares of a high conservation value bushland eg. Cumberland Plain Woodland. He decides to enter into a biobanking agreement which will designate the bushland as a biobank site and authorise him to undertake weed control, pest control and habitat protection measures.

Landowner A's biobank site generates biodiversity credits as his management actions improve the biodiversity values at the site. The biobank site and biodiversity credits are registered on the DEC's registers.

Landowner B is proposing to build a new residential development which will lead to the destruction of 10 hectares of Cumberland Plain Woodland. Landowner B uses the biobanking assessment methodology to work out the number of credits needed to offset the ecological impact, and then purchases the credits from Landowner A. The sale transaction is registered and Landowner B retires the credits from the scheme to offset the development's impact. Landowner A may, if necessary, be assisted with future management of the biobank site with funding from the Biobanking Trust Fund.

Streamlining development consent

The Bill arguably provides for a more streamlined procedure allowing the developer to apply to the Director-General of the DEC for a biobanking statement in relation to its development proposal (provided that it does not involve the clearing of native vegetation which is regulated under the Native Vegetation Act 2003 or it is otherwise excluded under regulations).

A biobanking statement would only be issued if the development is shown to improve or maintain biodiversity values (unless it is a development under Part 3A of the Environmental Planning and Assessment Act 1979 ("Planning Act") where the Minister can direct the Director-General to issue a statement regardless of the impact on biodiversity).

A development or activity under Part 4 or Part 5 of the Planning Act will be deemed "not likely to significantly affect any threatened species, population or ecological community under the Act, or its habitat" only if a biobanking statement has been granted in respect of that development or activity. In essence, a biobanking statement removes the current requirement to prepare a species impact statement and consult with the Minister of Environment and Director-General under the Planning Act. In addition, the consent authority or determining authority would not be required to (but might) take into account the impact of the development on biodiversity values in considering the merit of the proposal. The credit requirements and any other conditions of the biobanking statement will be incorporated into the development consent or approval.

Even if a biobanking statement is granted, the proponent would still, in general, have to demonstrate that all cost-effective measures were being carried out on-site to minimise any negative impact of the development on biodiversity. In other words, developers would have to take active steps to avoid on-site biodiversity impacts where possible before taking advantage of the biodiversity offsets.

Participation in the scheme will initially be voluntary. However, the Bill makes provision for a state environmental planning policy to make biobanking mandatory for certain classes of development or specific developments.

Trading bio-credits

Once registered, bio-credits can be traded, sold and retired from the scheme. Under the current proposed scheme anyone will be eligible to buy credits, opening up the market to those seeking buy and retire credits to achieve conservation outcomes but also investors and speculative traders seeking financial gain. DEC will hold the relevant registers and regulate the scheme.

It is too early to say how lucrative the biobanking market will be but there is definitely potential for companies with existing landholdings to negotiate biobanking agreements and build up a bank of bio-credits for on-sale. Investors may also want to consider strategic purchases of land to maximise the number and type of bio-credits in their portfolio for future trading. The scheme anticipates that "conservation brokers" will be used to identify potential biobank sites or management actions, negotiate biobanking agreements and assist with bio-credit trades.


On the face of it, the scheme appears to be a flexible and innovative way of allowing the Government to conserve biodiversity values and meet housing supply targets. However, the underlying mechanics of the scheme are not yet clear. Will only "like for like" habitat be used or will there be more flexibility in how biodiversity is assessed? The "biobanking assessment methodology" will be crucial to the success of the scheme as it will determine the way in which the scheme's currency (ie. the credits) will be identified, qualified and quantified.

It is likely that biobanking will be of greatest benefit to developers seeking to overcome an ecological impact which would be relatively easy to offset elsewhere. The scheme may also benefit large scale infrastructure and utilities companies that have no alternative routes for their pipelines, cables, roads etc. The scheme is not likely to be applicable, however, if the proposed development could impact very rare ecological communities or species or communities which have been over-cleared in the past as it would not be possible to generate a sufficient number of bio-credits in other locations.

The Bill is currently in the second reading stage in Parliament. If the Bill is passed before the end of the year, a pilot scheme is likely to commence in 2007. Participants will need to get comfortable with various risks, particularly during the trial stage. The current proposal allows offsets to be verified and credits created before the biodiversity gain has actually materialised. This may mean that the credit provider and/or developer may wish to insure against the risk that the biobank site will not generate the requisite credits (and enable alternative credits to be purchased to meet the biodiversity shortfall).

The DEC also has a large amount of discretion and special enforcement powers (with high penalties for non-compliance) which need to be factored into any decision to pursue this route over the existing threatened species assessments.

With the current legislative uncertainty and no trial results it is currently difficult to predict who will benefit most from biodiversity banking.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

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”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.