Australia: More flexibility for native vegetation offsets in South Australia

Key Points:

There is now more flexibility in achieving a Significant Environmental Benefit as required under an approval for the clearance of native vegetation.

The South Australian Government has introduced more flexibility for those undertaking native vegetation clearing by establishing regulatory mechanisms to allow:

  • excess credits to be used against future projects;
  • credits to be assigned to other entities; and
  • offsets to be satisfied by an accredited third party provider in certain instances.

Review of significant environmental benefit

Generally when an application for the clearance of native vegetation is approved, conditions are attached to the approval to ensure that the clearance is offset by restoration work that provides a Significant Environmental Benefit (SEB). Between 2009 and 2010, South Australia's Department of Environment, Water and Natural Resources (DEWNR) with the Native Vegetation Council undertook a review of the SEB process to determine whether SEB areas were delivering the intended environmental outcomes. The review found that while some SEB areas were delivering the required environmental gain, an unacceptable number were not.

Between 2011-2014 the South Australian Government considered various reforms designed in part to provide greater opportunities and flexibility for proponent in providing a SEB offset. This process culminated in amendments to the Native Vegetation Act 1991 through the Native Vegetation (Miscellaneous) Amendment Act 2013 and associated Native Vegetation (Credit for Environmental Benefits) Regulations 2015, which commenced in December 2015.

Creation of excess credits

The Council may impose a range of conditions, including those which relate to a requirement that the applicant achieve a SEB to compensate for the native vegetation to be cleared. Those conditions may include (but are not limited to) the amount of environmental benefit which must be achieved by the applicant or an amount of compensation which the applicant must pay into the Native Vegetation Fund.

Under the new provisions, a credit 1 may now be applied where a person has achieved the following and the Council is satisfied that it is of a significant value:

  • an environmental benefit which is not a benefit already required in relation to a consent to clear native vegetation or otherwise (benefit); or
  • an environmental benefit, in accordance with a consent to clear native vegetation, that exceeds the value of the minimum benefit needed to offset the loss of the cleared vegetation (excess benefit).

Where a person makes an application for credit for one of the above and the Council is satisfied that a benefit or excess benefit is of a significant value, the credit may be applied to:

  • an amount of environmental benefit the person must achieve; or
  • an amount of compensation proposed to be paid into the Fund; or
  • an amount to be paid into the Fund under any other provision as an alternative to achieving an environmental benefit.

To determine the value of an excess benefit, the Council must have regard to the proximate difference between the value of the environmental benefit achieved and the value of the environmental benefit that would, in Council's opinion, have been the minimum that would have been required in the circumstances.

Assignment of credits

Where a person has been credited with having achieved a SEB as described above (the assignor) they may, with the written approval of the Council, assign the whole or part of the credit to another person or body (the assignee).

The Council must not approve an application to assign credit until the assignor has complied with any requirement of the Council to do 1 or more of the following in respect of the native vegetation that is the subject of the credit to be assigned:

  • enter into a heritage agreement with the Minister; and/or
  • enter into a management agreement with the Minister.

Before giving its approval, the Council must have regard to any Regional Biodiversity Plan or Plans approved by the Minister that apply with any region relevant to the application.

The Council may impose conditions on any approval given which are binding on, and enforceable against:

  • the assignor; and
  • all owners an occupiers, and subsequent owners and occupiers, of the land where the relevant native vegetation is growing or situated.

Third party providers of Significant Environmental Benefits

The requirement that a SEB be achieved by a person may now, with the written approval of the Council, be satisfied by an accredited third party provider. The new Regulation provides what must be included in an accreditation application for an entity wanting to be an accredited third party provider.

The Council must not approve an application to have an accredited third party provider satisfy the SEB requirement unless the accredited third party provider:

  • enters into a management agreement with the Minister in respect of the native vegetation comprising the environmental benefit; and
  • has complied with any other requirements contained in the regulations.

Before giving its approval, the Council must have regard to any Regional Biodiversity Plan or Plans approved by the Minister that apply within any region relevant to the application.

Council may impose conditions on any approval given and those conditions are binding on, and enforceable against:

  • the accredited third party provider; and
  • all owners an occupiers, and subsequent owners and occupiers, of the land where the relevant native vegetation is growing or situated.

Implications of these changes for native vegetation clearing

With the commencement of these new provisions, there is now more flexibility in achieving a SEB as required under an approval for the clearance of native vegetation. Previously, a person could satisfy the requirement by providing a SEB or making payment of a contribution into the Fund as specified in the conditions of the approval; now alternative arrangements can be made to achieve compliance.

Where a person can provide a SEB that exceeds requirements, they may be eligible to receive a credit which could be applied to a future project requiring the clearance of native vegetation. This would be quite valuable where achievement of a SEB for the subsequent clearing is more difficult and payment of a contribution is of a greater expense than what was spent to achieve the greater SEB.

Equally of value is the ability to assign credits (which could be to a related entity) or to have the SEB achieved by an accredited third party provider, which potentially could be a less expensive alternative to paying a contribution into the Fund.

What next?

A policy, guide and manuals have been developed to support the reforms outlined above and are now available for public consultation until Friday, 19 February 2016 via one of the submission methods listed on DEWNR's website.

It is understood that the reforms will be fully implemented after the current public consultation period is complete and outstanding issues are addressed with the commencement date anticipated to be before the end of the 2015-16 financial year.

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1 At a value determined by Council, monetary or otherwise.

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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