NSW Planning, Environment & Government Update (July 2007) - Important Change To Major Projects

In our November 2006 update (click here to review) we reported upon proposed changes to the major project provisions of the Environmental Planning and Assessment Act 1979 (the Act). These changes removed the restriction preventing the Minister from approving developments that were wholly prohibited by an environmental planning instrument (EPI).

At that time, it was envisaged that the provisions of the Act would be changed to enable the Minister to approve wholly prohibited development subject to certain limitations to be placed on this power by the Environmental Planning and Assessment Regulations 2000 (the Regulations).

Surprisingly however, the Minister will not have the power to approve a project where the project or any part of the project would be prohibited by an EPI, unless the project is part of a concept plan. We suggest that developers may choose to proceed by way of concept plan applications to overcome this hurdle. But this will not assist on certain sensitive categories of land.

Developers have been awaiting the commencement of these changes since the amending Act was passed in December last year, and have been anxious to discover what the change may mean for major projects.

The amendments were delayed from commencing so that Regulations could be made relating to this issue. The relevant Regulations were gazetted last Friday.

In a surprising move, rather than facilitate the Minister's approval of prohibited projects, the Regulations provide far greater restrictions in relation to prohibited development than were previously imposed under Part 3A of the Act (although there is now the possibility of approval of a concept plan for wholly prohibited development).

In summary, the amendments to the Regulations provide that:

1. The Minister may not give approval for a project (or part of a project) or concept plan that:

   1. is located within an environmentally sensitive area of state significance or a sensitive coastal location; and
   2. is prohibited by an EPI.
2. The Minister may not give approval for a project (or part of a project) that:

   1. is not the subject of or associated with a concept plan; and
   2. b. is prohibited by an EPI.

A project will not be "prohibited" by an EPI if it is permissible under another EPI (for example, where a SEPP may override a LEP, ie SEPP (Seniors Living)), or if it is not permitted merely because of the application of a development standard (as distinct from a prohibition).

Prohibitions in EPIs therefore have full effect, other than where concept plan applications are used. Where the Minister could previously approve a project so long as it was not wholly prohibited, the new provisions prevent approval of projects where any part of the project is prohibited (subject to our comments below).

Prohibited development may only be approved in connection with a concept plan (and even then, only where the site is not located within an environmentally sensitive area of State significance or a sensitive coastal location). However, where a proponent utilises the concept plan provisions, the Minister will be able to approve wholly prohibited development (except where the site is located within an environmentally sensitive area of State significance or a sensitive coastal location).

The Minister has been given a new power to amend an EPI in order to authorise the carrying out of an approved project or concept plan. However, as this power is only available once an approval has already been issued, it does not operate to allow these restrictions on prohibited development to be overcome. The main purpose of this power is to clarify that underlying EPIs do not operate to restrict or prevent the carrying out of an approved project. It will also allow the Minister to remove obstacles to Part 4 assessment of particular stages of a concept plan.

In summary, despite anticipation by developers involved in major projects that the amendments would facilitate greater opportunities for approval of prohibited or partially prohibited development under Part 3A, the amendments have to some extent curtailed this ability. Concept plan approval is the only means by which prohibited development will be allowed, which may now be granted even where the development is wholly prohibited (except where the site is located within an environmentally sensitive area of state significance or a sensitive coastal location).

Advice should be sought on a case by case basis to determine whether land falls within the descriptions of an 'environmentally sensitive area of state significance' or a 'sensitive coastal location', and therefore whether wholly prohibited development has the potential to proceed by way of concept plan approval.

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.